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.
The sequential, dramatic waves of prosecutions against officials such as his 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, Senator Adam Schiff, cybersecurity chief Christoper Krebs and former special counsel Jack Smith, among others, is alarming. As his Truth Social messaging shows, Trump has personally directed such prosecution, demonstrating a weaponization of the judiciary against perceived political enemies. Some critics see this as the impulsive, emotional fits of the crazed Queen of Hearts in Alice in Wonderland, screaming “off with their heads” regarding any who displease her. What is missed in that perception is that these moves are far more deliberate, part of a large tactical pattern.
The charges against Powell that he lied to Congress due to building renovation costs overruns is ludicrous and 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, while Trump admitted last month that his own demolition and construction of a new ballroom in the White House’s East Wing has ballooned to 200% over budget. That is truly stunning, as this project was only begun six months ago and Trump, as a builder himself, should know how to estimate construction accurately.
The Fed renovation costs aren’t out of line, given that this is the first comprehensive renovation in the roughly 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 US tax payer funds. The Fed is funding these renovations out of its own budget as the Fed is entirely operationally self-sufficient, mostly funded primarily by its own investment income on the US Treasury bonds it owns — not congressionally appropriated taxpayer dollars.
Ambush gone awry
Trump did try to ambush Powell on national TV this summer, during a tour of the construction site, but it backfired, with Trump embarrassing himself and Powell correcting him — Trump’s claim that the renovations had ballooned to $3.1 billion was quickly shown to be incorrect by the Fed chair, who pointed out that figure included 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 the chair explained why he is being targeted: “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.”
The bipartisan endorsement of Powell’s assessment includes comments from Senator Thom Tillis, Republican of North Carolina and member of the Banking Committee, who concluded, “If there were any remaining doubt whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is not the independence of the Department of Justice that are in question.”
Fully 71% of the 200 CEOs at our recent Yale CEO Summit complained that Trump had already eroded the independence of the Federal Reserve through actions taken by the Trump 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 diversionary maneuvering on Trump’s part. In a forthcoming new book, Trump’s Ten Commandments (Simon & Schuster), we label this Trump’s “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 of his performance, and Economist/YouGov polling showing that 57% disapprove—with over half of even MAGA/Trump voters not supporting Trump on his handling of the Epstein files and affordability, healthcare, and ICE/immigration tactics, which have plummeted to 30% in recent polling.
And 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 pulls 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, until it eventually gets traction. These are all in Trump’s tool kit that we label his “Ten Commandments.” He is far from tone deaf or foolish. He is dumb as a fox.
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