Overview
- The Justice Department’s criminal investigation focuses on possible misstatements about renovation cost overruns, and Powell denies wrongdoing and calls the case a political pretext.
- Trump told Reuters he is in a holding pattern on Powell’s future and is weighing Kevin Warsh or Kevin Hassett as potential successors, while ruling out Treasury Secretary Scott Bessent.
- Global central bankers and all living former Fed chairs publicly defended the Federal Reserve’s independence and voiced support for Powell.
- Several Fed officials warned against political interference, and traders cut the odds of early rate reductions as officials signaled reluctance to ease under pressure.
- Some Republican senators, including Thom Tillis, threatened to block Fed nominees over the probe, as analysts cautioned that perceived politicization could lift inflation expectations and Treasury yields.