A federal judge put the brakes on the Justice Department's criminal probe of the Federal Reserve, saying it was part of an improper campaign by the Trump administration to pressure the central bank into cutting interest rates more aggressively.
Judge James Boasberg quashed subpoenas that had been issued to the Fed in January, ostensibly seeking information about cost overruns on the renovation of the Fed's headquarters. At the time, Fed chairman Jerome Powell had called that a pretext. And Judge Boasberg agreed.
"The Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President," Boasberg writes in a newly-unsealed opinion. "There is abundant evidence that the subpoenas' dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will."
The judge quoted from some of the dozens of attacks President Trump and his aides have leveled at Powell for failing to make deeper cuts in interest rates. The case has become a test of the Fed's ability to set monetary policy without political interference from the White House.
Sen. Thom Tillis, R-N.C., praised the decision.
"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 wrote in a social media post. "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."
DOJ says it will appeal Boasberg's ruling
U.S. Attorney Jeanine Pirro showed no sign of backing down, however, promising an appeal and labeling Boasberg an "activist judge."
"He has neutered the grand jury's ability to investigate crime," Pirro said in a news conference after the decision was unsealed. "As a result, Jerome Powell today is now bathed in immunity."
Powell's term as Fed chairman expires in May, but Tillis, who sits on the Senate Banking Committee, has threatened to block any vote on Trump's nominee to succeed him until the Justice Department probe is dismissed.
"Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair," Tillis wrote.
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