U.S. judge rejects Trump administration's subpoena against Powell, Justice Department vows to appeal

A federal judge in the United States dismissed a subpoena from the Department of Justice against Federal Reserve Chairman Jerome Powell, citing almost no evidence, ruling that the subpoena was intended to suppress rather than for legitimate law enforcement, significantly undermining the Trump administration's efforts to pressure the Federal Reserve through legal means. In a ruling announced on Friday, the 13th, Eastern Time, Chief Judge James Boasberg of the U.S. District Court for the District of Columbia wrote that "substantial evidence indicates" that the primary purpose of these subpoenas was to "harass and pressure Powell to submit to the president's will or resign to make way for a Federal Reserve chairman willing to cooperate." Boasberg pointed out that the Trump administration "provided no evidence" that Powell committed any crime, "other than displeasing the president (Trump)." The Department of Justice immediately announced it would appeal, with prosecutor Jeanine Pirro, leading the U.S. Attorney's Office for the District of Columbia, denouncing Boasberg's ruling as "outrageous" at a press conference. This judicial battle will have a direct impact on the direction of Federal Reserve policy and interest rate outlook. Thom Tillis, a key member of the Senate Banking Committee and Republican senator from North Carolina, previously warned that as long as the Department of Justice's investigation into Powell remains unresolved, he would block the nomination confirmation of Kevin Warsh, Trump's nominee for the next Federal Reserve chairman. Media believe that Boasberg's ruling means Powell is more likely to remain in office until his term expires in May this year. Judge: Subpoena's Motive Improper, Truly Retaliation for Policy Disagreement Boasberg's ruling was unusually sharp. The ruling was dated Wednesday, March 11, and officially released on Friday, March 13. The ruling document shows that the subpoena nominally involved a $2.5 billion renovation project at the Federal Reserve headquarters and Powell's testimony before the Senate Banking Committee regarding the project last year. The Department of Justice delivered the subpoena to the Federal Reserve in January this year, threatening criminal prosecution. Powell responded at that time with a rare and strong video statement, directly pointing out that the investigation was retaliation for the Federal Reserve's refusal to set interest rates according to Trump's wishes. Boasberg wrote in the ruling: "On one hand, the evidence indicates that the government issued these subpoenas to the Federal Reserve Board to pressure its chairman to vote in favor of interest rate cuts or resign. On the other hand, the government provided almost no evidence to suspect Powell of criminal behavior; the reasons were so thin and hollow that the court could only conclude that these reasons were mere pretexts." The Federal Reserve declined to comment. Prosecutor Vows to Appeal, Claims Ruling Interfered by "Radical Judge" At a press conference held on the same day the ruling was announced, prosecutor Pirro strongly criticized the ruling. She stated that Powell is "now wrapped in a cloak of immunity," adding, "This is wrong, with no legal basis." Pirro stated that the process of investigating Powell "was arbitrarily disrupted by a radical judge," and that the process "should have run its course, but it did not. They should be ashamed of this." Pirro made it clear that the Department of Justice would appeal the ruling The White House did not immediately respond to this matter. The Confirmation Prospects for Waller's Nomination Clouded, Rate Cut Timeline May Be Further Delayed The direct political consequence of this legal tug-of-war points to Waller, the nominee for the next chair of the Federal Reserve appointed by Trump. On January 9 of this year, the Federal Reserve received a subpoena related to Powell's congressional testimony last year regarding the renovation project of the Federal Reserve headquarters. Powell issued a rare video statement condemning the investigation, and several Republican lawmakers defended the Federal Reserve. Several key senators, including Republican Senator Thom Tillis from the Senate Banking Committee, warned that the nominee for the Federal Reserve appointed by Trump would face stricter scrutiny after the Department of Justice issued a subpoena to the Fed regarding Powell's statements about the renovation project. On the same day that Trump announced Waller's nomination on January 30, Tillis stated on social media that Waller is "a qualified nominee with a deep understanding of monetary policy," but also indicated that he would oppose the nomination until the aforementioned Fed investigation is resolved. Tillis stated on social media this Friday that the new ruling "confirms how weak and absurd the criminal investigation into Chairman Powell is, merely a failed attack on the independence of the Federal Reserve. The appeal will only further delay the confirmation process for Waller as Fed Chair." He also wrote, "The U.S. Attorney's Office for the District of Columbia should back off to avoid humiliation." The media pointed out that the market had previously pushed back the expectation for the Federal Reserve's first rate cut to the end of this year; under the current circumstances, the likelihood of Powell remaining in office until the end of his term has increased. This means that the probability of interest rates being maintained above the level desired by Trump has also increased. Federal Reserve officials have recently expressed a generally cautious stance, with only Stephen Miran and Christopher Waller, both nominated by Trump, explicitly supporting a rate cut