By Jeffrey Blehar
Monday, January 12, 2026
Any reader of American political and economic news is
likely already familiar with the long-simmering tensions between Federal
Reserve Chairman Jerome Powell and President Donald Trump: Trump wants lowered
interest rates and “loose money”; Powell (as well as nearly every single
economist in America, including the vast majority of conservative economists)
feels otherwise after the runaway inflation of the Biden era.
The Fed’s official target is 2 percent inflation, as
opposed to its long-elevated levels. We’re nowhere near that right now, in
large part because of Trump’s wholly self-generated global tariff regime, which
has helped raise prices on virtually everything except gasoline in the short
term. Trump demands a political Band-Aid to cover up the self-inflicted wound;
Powell serves the nation, and not Trump’s immediate political desires.
With that understanding — and with the understanding that
in the Trump Era we live in an age seemingly bereft of political norms, or
anything except the will to exercise raw power — I was despairingly depressed
but strangely unsurprised when Powell made a stunning
announcement late last night:
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. That testimony concerned in part a multi-year project to renovate
historic Federal Reserve office buildings. 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. This new threat is not about my testimony last June, or about the
renovation of Federal Reserve buildings. It is not about Congress’s oversight
role; the Fed through testimony and other public disclosures made every effort
to keep Congress informed about the renovation project. 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. This is about whether the Fed will be able to continue to set
interest rates based on evidence and economic conditions, or whether instead
monetary policy will be directed by political pressure or intimidation.
I have served at the Federal
Reserve under four administrations, Republicans and Democrats alike. In every
case, I have carried out my duties without political fear or favor, focused
solely on our mandate of price stability and maximum employment. Public service
sometimes requires standing firm in the face of threats. I will continue to do
the job the Senate confirmed me to do, with integrity and a commitment to
serving the American people.
The statement speaks for itself. But I will be even
blunter: What the Trump administration is doing here is pure thuggery, lawfare
of the most shameless and self-disgracing sort. What defense does MAGA wish to
offer for Trump threatening to indict the chairman of the Fed on fake charges
because he won’t cut interest rates like Trump demands? Trump cannot legally
remove Powell from his position except “for cause,” and so here he is,
directing his Justice Department to manufacture a “cause” he can use to threaten
Powell. I can hear the constant refrain of online Trump supporters ringing in
my ears: “I voted for this.” Did you, really? Did you vote for this?
Let us pause also to note the hilarity (seemingly almost
intentional, as if to emphasize the near-Shakespearean insolence
of office) of Trump threatening to indict Powell over purportedly
mishandling the “renovations of historic buildings.” Donald Trump literally just
demolished the East Wing without any
sort of review, and then illegally slapped his name on the Kennedy Center to
end the year. And bragged about how nobody could stop him from doing it! Does
the administration see this irony? Maybe Trump does not, but those surrounding
him surely do — and I’m halfway convinced that this aspect of things is an
“intentional flex,” what they enjoy about their current amoral exercise of
power more than anything else. We can do whatever we want, use any tool we
wish, because we’re in charge now. (This power-tripping attitude comes
through with crystalline purity in the public rhetoric of Trump’s most
prominent underlings, such as Stephen Miller.)
It’s frightening to see a methodology shaping up in the
Trump DOJ’s nakedly political indictments. This is now the second time they
have moved against a disliked political figure by sifting through random Senate
testimony to find something they can hang a flimsy indictment on. It is
precisely the brand of injustice we all learned to revile from the Stalinist
era: “Show me the man, and I will find you the crime.” The fact that all this
pressure is so shamelessly out in the open — and greeted with distractable
indifference from the media and Trump’s increasingly coarsened supporters —
feels like a degradation of American politics, and a quietly slow-rolling,
endlessly accumulating civic and social tragedy. The cost of the politics of
this era will be felt long after Trump is gone. I fear we will never get the
poison fully out of our blood.
So I invite all who disagree with me: Defend this! Shift
your ground to the cheap and temporary rationalizations of politics instead of
the arguments of law and ethics. Tear down yet another piece of what you
believe to be the mere scaffolding of our Republic, only to discover that
you’re removing load-bearing pillars. Defend this, and don’t be surprised when
suddenly a firm structure no longer bears up under the shocks and stresses.
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