Trump Criticizes Federal Reserve Chair Jerome Powell Amid Ongoing Investigation

President Donald Trump has sharply escalated his criticisms of Federal Reserve Chair Jerome Powell, publicly labelling him “either corrupt or incompetent” as tensions over the central bank’s leadership reach a new peak. Trump’s remarks come in the wake of an ongoing federal criminal investigation into Powell, drawing sharp reactions from lawmakers, economists, and central banking authorities across the political spectrum.

Speaking to reporters earlier this week, Trump argued that Powell’s handling of both the Federal Reserve’s policy decisions and a major renovation project at the Fed’s Washington headquarters reflected poorly on his leadership. “He’s billions of dollars over budget, so either he’s incompetent, or he’s crooked,” Trump said, emphasising his frustration with Powell’s performance as head of the U.S. central bank.

Context: The DOJ Investigation Into the Fed

The Justice Department has opened a criminal investigation into Powell over the costly renovation of the Federal Reserve’s headquarters — a project that has ballooned to roughly $2.5 billion, far above initial estimates. Prosecutors are examining whether Powell provided false or misleading information to Congress regarding the project’s cost and scope, following subpoenas issued by a grand jury.

Powell, who was reappointed by Joe Biden with Trump’s earlier support, has denied any wrongdoing, stating that the investigation is politically motivated. In statements to lawmakers and the public, he described the potential criminal charges as a consequence of prioritising sound monetary policy rather than succumbing to political pressure.

Trump’s Criticism: Interest Rates and Leadership Style

Trump has long been at odds with Powell’s approach to interest rate policy, arguing that the Federal Reserve has kept rates too high and failed to stimulate economic growth. In his latest remarks, Trump reiterated his belief that the Fed chair should pursue more aggressive rate cuts — a demand that Powell and many economists say would risk igniting inflation.

“He doesn’t do a very good job,” Trump said about Powell, adding that he believed he could have handled the Fed’s renovation project far more efficiently. Trump’s comments reflected his broader skepticism of bureaucratic institutions and an ongoing push to exert influence over traditionally independent federal bodies.

Political and Institutional Backlash

Trump’s blunt remarks have sparked significant pushback, even from within his own party. Some Republican senators have voiced concerns about the federal investigation and cautioned against undermining the Fed’s independence. Senator Thom Tillis, for instance, said he would not support any Trump nominee for Fed leadership until the probe is fully resolved, highlighting unease among lawmakers about potential political interference.

Treasury Secretary Scott Bessent — whom Trump once considered as a potential Powell replacement — has privately expressed discomfort with the Justice Department’s investigation into the Fed chair, according to multiple reports. Bessent conveyed these concerns directly to Trump, underscoring the internal friction within the administration over how far to push the case.

Central Bank Solidarity and International Response

Beyond domestic politics, officials from central banks around the world have voiced solidarity with Powell and the Federal Reserve’s independence. Leaders of major central banks emphasised that central bank autonomy from political influence is essential for maintaining economic stability and controlling inflation — particularly in an era of global economic uncertainty.

Economists have warned that political meddling in monetary policy could undermine confidence in the U.S. financial system. If markets believe that interest-rate decisions are being driven by political agendas rather than economic fundamentals, the result could be heightened inflation expectations and volatility in global markets.

Powell’s Position and Potential Succession

Powell’s current term as Fed chair is set to expire in May 2026, though he can remain on the Federal Reserve Board until 2028 even after stepping down as chair. Trump has signalled his intention to nominate a successor in the coming weeks, naming potential candidates that include former Fed Governor Kevin Warsh and economist Kevin Hassett.

Despite Trump’s harsh criticism, however, he has stated he has no immediate plan to fire Powell. In interviews with Reuters, Trump acknowledged that it was “too early” to make a decision about Powell’s future role, underscoring the ongoing uncertainty surrounding the Federal Reserve’s leadership.

Broader Implications for Federal Reserve Independence

The controversy over the Powell investigation and Trump’s public denunciations have reignited debate about the independence of the Federal Reserve — a principle traditionally upheld to insulate monetary policy from day-to-day political pressures. Critics argue that the DOJ probe and Trump’s rhetoric could set a dangerous precedent, potentially weakening trust in U.S. economic governance.

Supporters of the investigation, on the other hand, contend that no public official — including the head of the Federal Reserve — should be immune from scrutiny, particularly if there are legitimate questions about decision-making and accountability.

As this high-profile debate unfolds, Powell’s role continues to draw intense public and political attention, with implications that extend far beyond Washington — affecting markets, monetary policy, and confidence in one of America’s most important institutions.