Trump insists on investigating Powell, Fed storm escalates: leadership change imminent, global markets on high alert

February 3 News, U.S. President Donald Trump, during a question-and-answer session in the White House Oval Office, stated that investigations into Federal Reserve Chairman Jerome Powell should continue and emphasized “stick with it and see what the results are.” When asked whether he hoped Washington D.C. federal prosecutor Jeanine Pirro would halt the related investigation, Trump gave a negative response.

Subsequently, Trump again criticized Powell, accusing him of “over-spending public funds” on the Federal Reserve headquarters renovation project, and hinted that the matter should be thoroughly investigated through judicial procedures. In response, Powell stated in a video statement released on January 11 that the Federal Reserve has received a grand jury subpoena, and the investigation could lead to criminal charges. He believes that the true purpose of this action is to pressure the Fed into making concessions on interest rate policies.

Powell emphasized that the Federal Reserve always prioritizes the public interest when formulating monetary policy, rather than catering to the personal preferences of any political figure. His term will end this May, but this controversy has become the climax of his long-standing conflict with Trump. Since Trump announced his bid for re-election, disagreements over interest rates, inflation, and economic direction have continued to escalate.

It is noteworthy that after Powell was investigated, a collective show of support was issued by central bank governors from multiple countries. Leaders from Sweden, Denmark, Switzerland, Australia, Canada, and other nations signed a joint letter stating that Powell is a “respected colleague,” whose professional integrity and expertise are widely recognized by international peers.

Meanwhile, Trump has announced his successor for Powell: former Federal Reserve Board member and banker Kevin Warsh, who will take over as chairman in May. The public generally believes that this personnel change, combined with the investigation, could have a lasting impact on global financial market expectations, the independence of the Federal Reserve, and the sentiment toward U.S. dollar assets. Topics such as “Trump and Fed conflicts,” “Powell investigation progress,” and “Federal Reserve Chair replacement” have become highly focused issues in the current macro-financial field. (Business Insider)