US judge blocks subpoenas against Federal Reserve Chair Jerome Powelli

HOUSTON, United States

A federal judge on Friday blocked subpoenas against Federal Reserve Chair Jerome Powell, according to media reports.

The subpoenas were issued by the Department of Justice (DOJ) in a probe into the management of the central bank's renovation.

"A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning," Judge James Boasberg, the chief judge on the US District Court for Washington, DC, said in a court filing.

"The Government has produced essentially zero evidence to suspect Chair Powell of a crime," he said. "Indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual."

"The Court therefore finds that the subpoenas were issued for an improper purpose and will quash them," Boasberg added.

Powell previously said that the threatened indictment was related to his testimony before the US Senate last June about the renovation of Federal Reserve office buildings.

"No one, certainly not the chair of the Federal Reserve, is above the law," Powell said in a Jan. 11 video statement. "But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."

Jeanine Pirro, Trump's US Attorney for the District of Columbia, said at a news conference that the judge’s order wrongly exonerated Powell.

"No one is above the law, but for the first time, a judge’s ruling that a grand jury subpoena, on its face legal in all regards, can be ignored, because the judge thinks the subject is beyond reproach," said Pirro. "This is a decision that is untethered to the law."

US President Donald Trump has demanded lower interest rates and has continually attacked Powell and other central bank officials for not slashing rates, which Trump has criticized as an affordability crisis for consumers.

The Fed cut interest rates three times last year.

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president," Powell said when the subpoenas were first issued.

The probe has infuriated members of Congress, including North Carolina Republican Sen. Thom Tillis, who said he will block the confirmation of Trump's nominee to replace Powell, Kevin Warsh, until the probe is dropped.

"This ruling confirms just how weak and frivolous the criminal investigation of Chairman Powell is and it is nothing more than a failed attack on Fed independence," Tillis posted on US social media platform X. "We all know how this is going to end and the D.C. U.S. Attorney’s Office should save itself further embarrassment and move on.”

Pirro said she will appeal the ruling, to which Tillis responded, "Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair."

Boasberg said his decision "is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation."