The only surprising quality regarding President Trump unleashing federal investigators to prepare potential prosecution criminal charges against the highly respected Federal Reserve Chairman Jay Powell — a Trump appointee himself — is that anyone is surprised by this news.
Financial markets initially dropped before rebounding as investors blew off Trump’s Justice Department move as the flailing bluster of a lame duck and a fissure opened in the GOP, with open concern about the sacred independence of the DOJ as well as of the Federal Reserve.
For example, prominent Republican Sen. Thom Tillis, of the Senate Banking Committee, asserted that “It is now the independence and credibility of the Department of Justice that are in question.”
Similarly, Republican Rep. French Hill, chairman of the House Financial Services committee, called this investigation “an unnecessary distraction that could undermine this Administration and sound monetary decisions.”
Even Trump’s own Treasury Secretary, Scott Bessent, challenged Trump on his “revenge probe” of Powell.
The sequential, dramatic waves of prosecutions against such officials as Trump’s former National Security Advisor John Bolton, former FBI chiefs James Comey and Christopher Wray, New York Attorney General Letitia James, former CIA chief John Brennan, Federal Reserve Governor Lisa Cook, former Homeland Security official Miles Taylor, Sen. Adam Schiff, cybersecurity chief Christoper Krebs, and former special counsel Jack Smith, among others, is alarming. As Trump’s Truth Social messaging shows, he has personally directed such prosecutions, showing a weaponization of the judiciary against perceived political enemies. Some critics see this as the impulsive emotional fits of the crazed Queen of Hearts from Alice in Wonderland, screaming “off with their heads” regarding any who displease her. However, what is missed is that these moves are far more deliberate actions, part of a larger tactical pattern.
The charges against Powell — that he lied to Congress due to building renovation costs overruns — is ludicrous and such charges will surely be dismissed in court. The alleged 40% cost overruns may be true but they are not criminal. let alone reckless. The actual Fed renovations are costing $2.5 billion, which is 40% overbudget due to cost inflation, but Trump admitted last month that his own East Wing demolition and construction of a new White House ballroom has ballooned to 200% over budget. This is truly stunning as this project was only six months ago and Trump should know how to estimate construction accurately as a builder himself.
These costs are not out of line, given that this is the first comprehensive renovation in the 90 years since the Marriner Eccles building was built in 1937. By contrast, the nearby Hart, Russell, and Dirksen Senate Office buildings and the Cannon House Office building have continuously undergone massive renovations over the decades.
Plus, regardless of the nature of these common cost overruns, not a penny of this is from U.S. taxpayer funds. The Fed is funding these renovations out of its own budget as the Fed is entirely operationally self-sufficient, funded primarily by its own investment income on the U.S. Treasury bonds it owns.
Trump’s attempted ambush of Powell on national TV this summer, during a tour of the construction site, backfired, with Powell correcting and embarrassing him. Trump’s false statement that the renovations had ballooned to $3.1 billion was shown to incorrectly include a separate, already-completed renovation of a different building.
On the surface, Trump is angry that the Federal Reserve is not cutting rates faster and further and that is how chairman Powell explains why he is being targeted as he complained: “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. … 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.”
Fully 71% of the 200 CEOs at my recent Yale CEO Summit complained that Trump had already eroded the independence of the Federal Reserve via actions from his administration, and 81% stated that they prefer Governor Chris Waller as Powell’s prospective successor when the chairman’s term ends this spring, presuming he will fortify Fed independence.
So, if this lawfare attack is not an impulsive tantrum, what is the strategic rationale? Like Trump’s false assertion this month that the attack on Venezuela was driven by the advance interest of U.S. oil producers, which they soundly denied, claiming Venezuela was “uninvestable,” this was more of Trump’s diversionary maneuvering. In my new book, Trump’s Ten Commandments (Simon & Schuster), I label this his “Wall of Sound” tactic to change the public narrative from his faltering polling with Gallup’s end of year national survey reporting only 36% of the nation approving and the Economist/YouGov finding that 57% disapprove. Even over half of MAGA/Trump voters don’t support Trump on his handling of the Epstein files and affordability and healthcare. His ICE/immigration tactics have plummeted 30% in recent polling.
But Trump has succeeded in his mission of getting every media outlet to drop their 24/7 hammering on his weaknesses on salient domestic policies. Plus, he is pulling three other levers in this Fed/Powell diversionary maneuver — he invokes his “hub & spoke” leadership model where there are no independent agencies of control, his crushing of adversaries with selective retribution, and his deft manipulation of the classic mass communication propaganda tool “sleeper effect” where a false message is repeated in an unrelenting determined way and eventually gets traction.
These are four of the 10 tools in Trump’s tool kit that I label his “Ten Commandments.” He selects them deliberately and not truly impulsively despite his bravado. Trump is far from tone deaf or foolish. He is dumb as a fox, but even foxes, generally symbol of intelligence and slyness, become victims of their own presumed cleverness.
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