A US federal judge has canceled subpoenas issued by the Justice Department against Federal Reserve Chairman Jerome Powell. According to publicly released court documents, the decision is considered a major blow to the US government’s ongoing investigation.
U.S. District Judge James Boasberg, in his ruling, stated that there is strong evidence that the U.S. government used subpoenas for political pressure. Boasberg said, “The vast amount of evidence shows that the government sent these subpoenas to force Powell to lower interest rates or to resign.” The judge also emphasized that almost no evidence was presented that Powell committed a crime, stating that the government’s justifications were “weak and unfounded.”
The decision is seen as a significant setback for US President Donald Trump, who has frequently criticized Powell for not lowering interest rates. Trump has long criticized Powell and had asked the Justice Department to launch an investigation into the Fed chairman.
The investigation also highlighted the Trump administration’s pressure on the Federal Reserve, which is considered politically independent. Trump harshly criticized Powell on social media, while his administration also took a case to the US Supreme Court to remove Lisa Cook, a Fed Board member appointed by former President Joe Biden.
Powell had long avoided responding to these criticisms. However, in a video released a few days after receiving his subpoena in early January, he described the investigation as an attack on the independence of the Fed.
Powell’s term as Fed chairman will end in May.
*This is not investment advice.