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Trump team escalates attack on Fed’s Powell with criminal indictment threat

A criminal probe into Federal Reserve Chair Jerome Powell has intensified tensions between the White House and the central bank, fuelling fears of political interference and renewed concerns over the Fed’s independence.
A worker walks at the construction site of the Federal Reserve headquarters, after US President Donald Trump renewed his threat to bring a lawsuit against Federal Reserve Chair Jerome Powell over Powell’s management of renovations of the building, in Washington, DC, US, 12 January 2026. REUTERS/Kevin Lamarque
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A worker walks at the construction site of the Federal Reserve headquarters, after US President Donald Trump renewed his threat to bring a lawsuit against Federal Reserve Chair Jerome Powell over Powell’s management of renovations of the building, in Washington, DC, US, 12 January 2026. REUTERS/Kevin Lamarque
Highlight:
- Powell accuses Trump administration of using legal threats to influence Fed policy
- Subpoenas mark escalation in Trump-Powell conflict over interest rates
- Republican Senators Tillis, Murkowski, Cramer condemn probe
- Former Fed chairs call it an attempt to undermine Fed independence
The Trump administration’s move to open a criminal investigation into Federal Reserve Chair Jerome Powell escalates the president’s long-running pressure campaign against the central bank, drawing fire from the Fed chief who called the move a “pretext” to influence interest rates and condemnation from former Fed chiefs and key members of Trump’s Republican Party.
The Justice Department’s threat of indictment, ostensibly focused on comments Powell made to Congress about a building renovation project, also sent rates on longer-term US Treasury bonds up, as investors parsed what a less independent Fed could mean for inflation and monetary policy.
Such a market reaction could, if amplified, constrain Trump’s efforts to reshape the Fed, considered the most influential central bank in the world and a cornerstone of the world financial system. It could also backfire against Trump’s efforts to address broad concerns about “affordability” if long-term borrowing costs rise further.
The independence of central banks, at least in setting rates in order to control inflation, is considered a central tenet of robust economic policy, insulating monetary policymakers from short-term political considerations and allowing them to focus on longer-term efforts to keep prices relatively stable.
On Monday, former Fed chairs Janet Yellen, Ben Bernanke and Alan Greenspan joined with former federal government economic policy leaders from both political parties in raising the alarm.
“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly,” they wrote. “It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”
US Republican Senator Thom Tillis, a member of the Senate Banking Committee that vets presidential nominees for the Fed, called the move a “huge mistake” on Sunday and said he would oppose any Trump nominees to the Fed, including whoever is named to succeed Powell as central bank chief, “until this legal matter is fully resolved.”
He was joined on Monday in condemning the development by fellow Banking Committee member Kevin Cramer and Senator Lisa Murkowski, who wrote on X that “the stakes are too high to look the other way: if the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer.”
“Obviously there are more concerns that Fed independence is going to be under the gun, with the latest news on the criminal investigation into Chair Powell really having reinforced those concerns,” Jan Hatzius, chief economist at Goldman Sachs, said at the investment bank’s annual global strategy conference in London.
Gold hit a record high and the dollar fell. Major US stock indexes opened lower, with bank stocks under pressure over a Trump proposal to cap interest rates on credit cards.
Powell – who was nominated by Trump to lead the Fed in late 2017 and confirmed by the Senate to the position in early 2018 – will complete his term as Fed chief in May, but he is not obligated to leave its Washington-based Board of Governors until 2028, and a number of analysts saw the latest move by the administration as adding to the chances that he will defiantly remain at the central bank.
The criminal indictment threat emerged about two weeks before Trump’s effort to fire another Fed official, Governor Lisa Cook, will be argued before the Supreme Court.
Until now Powell had avoided public disagreement with the Trump administration, Republican lawmakers had been largely silent and investors had been warily watching as the sparring match between the White House and the Fed played out during Trump’s second term.
US President Donald Trump, Federal Reserve Chair Jerome Powell, and Director of the Office of Management and Budget (OMB) Russell Vought tour the Federal Reserve Board building, which is currently undergoing renovations, in Washington, DC, US, 24 July 2025. REUTERS/Kent Nishimura
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US President Donald Trump, Federal Reserve Chair Jerome Powell, and Director of the Office of Management and Budget (OMB) Russell Vought tour the Federal Reserve Board building, which is currently undergoing renovations, in Washington, DC, US, 24 July 2025. REUTERS/Kent Nishimura
Powell’s pointed response and signs of congressional pushback appear to open a new and more highly charged chapter in that row.
Trump officials’ latest salvo was revealed late on Sunday by Powell, who said the Fed had received subpoenas from the US Justice Department last week pertaining to remarks he made to Congress last summer over cost overruns for a $2.5 billion building renovation project at the Fed’s headquarters complex in Washington.
“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June,” Powell said. “I have deep respect for the rule of law and for accountability in our democracy. No one – certainly not the chair of the Federal Reserve – is above the law.”
“But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure” for lower interest rates and more broadly for greater say over the Fed, he said.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’ oversight role … Those are pretexts. 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.”
Trump told NBC News Sunday that he had no knowledge of the Justice Department’s actions. “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said.
A Justice Department spokesperson declined to comment on the case but added: “The Attorney General has instructed her US Attorneys to prioritise investigating any abuse of taxpayer dollars.”
Top Stories
Govt cancels Principal Secretary Siraz Uddin Miah’s contract

The ministry said the decision was taken following his own request
Logo of Bangladesh Government.
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Logo of Bangladesh Government.
The government has cancelled the contractual appointment of M Siraj Uddin Miah as principal secretary to the chief adviser, according to an official notification issued by the Ministry of Public Administration.
The ministry said the decision was taken following his own request, revoking the remaining tenure of his contract with immediate effect.
Miah, a former senior bureaucrat, had been appointed as principal secretary to Chief Adviser Muhammad Yunus on 2 October 2024 on a two-year contractual basis. His tenure was originally scheduled to continue until September this year.
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TIB clarifies findings, says data on fake votes misrepresented

It says generalising this sample-based finding to characterise the entire election as being marked by widespread fake voting is “completely incorrect, baseless and misleading”
Logo of Transparency International Bangladesh.
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Logo of Transparency International Bangladesh.
Transparency International Bangladesh (TIB) has said its findings on isolated incidents of fake voting in the 13th National Parliamentary Election have been misrepresented, leading to misleading narratives about the overall credibility of the polls.
In a press release issued today (16 February), the organisation stated that data presented at a press conference marking the release of its report titled “Observation on the 13th National Parliamentary Election Process and Affidavit-based Review” had been inaccurately interpreted by sections of the media.
TIB clarified that its field-level research was conducted using a random sampling method across 70 selected constituencies.
“Among these 70 randomly selected constituencies, incidents of one or more fake votes were found in 21.4% of constituencies,” the statement said.
However, the organisation stressed that generalising this sample-based finding to characterise the entire election as being marked by widespread fake voting is “completely incorrect, baseless and misleading.”
According to TIB, the research was not designed to provide a nationwide quantitative estimate of irregularities but to observe and analyse selected aspects of the electoral process.
The anti-corruption watchdog urged media outlets that have already published or broadcast what it termed misinterpretations to issue prompt corrections.
It added that failure to do so would compel the organisation to view such presentations as deliberate attempts to mislead the public.
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Europe aims to rely less on US defence after Trump’s Greenland push

Transatlantic ties have already been strained over the past year by Donald Trump’s return to the White House. But the US president’s push to annex Greenland dramatically increased European doubts about Washington’s commitment to protect the continent through the NATO alliance
A 3D-printed miniature model of US President Donald Trump and the European Union’s flag are seen in this illustration taken January 27, 2025. Photo: REUTERS/Dado Ruvic/Illustration/File Photo
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A 3D-printed miniature model of US President Donald Trump and the European Union’s flag are seen in this illustration taken January 27, 2025. Photo: REUTERS/Dado Ruvic/Illustration/File Photo
Highlights:
- Europeans seek stronger defence amid strained US ties
- Rubio’s speech offers limited reassurance to Europeans
- Challenges in European defence projects due to internal disputes
- Zelenskiy reminds delegates of brutality of war
European Commission President Ursula von der Leyen reflected a feeling of profound change among European leaders at this weekend’s Munich Security Conference when she said: “Some lines have been crossed that cannot be uncrossed anymore”.
Transatlantic ties have already been strained over the past year by Donald Trump’s return to the White House. But the US president’s push to annex Greenland dramatically increased European doubts about Washington’s commitment to protect the continent through the NATO alliance.
US Secretary of State Marco Rubio offered limited reassurance to Europeans in his conference speech. Rubio said the US wanted to work with Europe and used a warmer tone than Vice President JD Vance last year. But he was critical of Europe’s recent political course and did not mention NATO, Russia or Moscow’s war in Ukraine – issues on which a gulf has emerged between the US and its partners in the alliance.
With the war about to enter its fifth year and Moscow viewed as an increasing threat by its European neighbours, leaders from the continent declared they would accelerate efforts to boost their own defences and rely less on the US.
That, in theory, puts them on the same page as Trump. His administration says it expects Europe to take primary responsibility for the conventional defence of the continent in the coming years. In return, Washington will keep its nuclear umbrella over Europe and uphold NATO’s mutual defence pact.
A ‘european pillar’ of nato
German Chancellor Friedrich Merz, French President Emmanuel Macron and British Prime Minister Keir Starmer pledged their commitment in Munich to a stronger “European pillar” within NATO. But a stronger home-grown defence is also a hedge against Trump or a future US leader deciding not to defend Europe.
“This new beginning is right under all circumstances. It is right if the United States continues to distance itself. It is right as long as we cannot guarantee our own security on our own,” Merz told the conference on Friday.
In another sign of the nervousness surrounding US security commitments, Merz said he had begun talks with Macron about a European nuclear deterrence.
France holds the only truly independent nuclear deterrent in Europe since Britain’s Trident nuclear missiles are made and maintained by the United States.
Will deeds match words?
The big question for Europe and its leaders is whether they can match their words with deeds – to buy and develop new weapons systems, to fill gaps in their arsenals in areas such as long-range missiles and to coordinate their work.
The signs so far are mixed.
Driven by fears of Russia and exhortations from Trump, European countries have boosted defence spending. NATO members agreed last year to raise spending on core defence from 2% of GDP to 3.5% of GDP, with a further 1.5% to be spent on other security-related investments.
European defence spending has risen nearly 80% since before the war in Ukraine began, von der Leyen told the Munich conference.
European countries are forming consortia to build complex weapons systems. Defence ministers from France, Germany, Italy, Poland and Sweden signed a letter of intent on Thursday to advance work on European Long-range Strike Approach (ELSA), a project to develop “deep strike” missiles.
On the sidelines of a NATO defence ministers’ meeting on Thursday, coalitions of European countries agreed to work together on four projects, including ballistic missile defence and air-launched munitions.
Projects struggle due to squabbles
But some high-profile pan-European projects have struggled to get off the ground. The future of the FCAS French-German-Spanish fighter jet project has been in the balance for months, with the partners unable to agree on the share of work for the companies involved.
Debates on European Union defence projects have been accompanied by wrangling over whether they should be limited to EU companies or open to others.
France has been the strongest advocate to “buy European” provisions while the likes of Germany and The Netherlands argue for a more open approach.
Amid the debates in the swanky Bayerischer Hof hotel, Ukrainian President Volodymyr Zelenskiy brought home the reality of modern war, surrounded by giant screens showing images and statistics of Russian attacks. Last month alone, Ukraine was attacked by more than 6,000 drones and 150 missiles.
“During this war, weapons evolve faster than political decisions meant to stop them,” he told the delegates.
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