Overview
- The Justice Department served grand jury subpoenas tied to Jerome Powell’s June testimony on a $2.5 billion Fed headquarters renovation, which he calls a political pretext.
- President Trump told Reuters he has no immediate plan to remove Powell, floated Kevin Warsh or Kevin Hassett as successors, ruled out Scott Bessent, and signaled a decision within weeks.
- Removal of Fed governors requires legal cause, and Republican Senator Thom Tillis has threatened to block nominees until the investigation is resolved, complicating any near‑term reshuffle.
- More than a dozen foreign central bank chiefs expressed “full solidarity” with Powell, while Jamie Dimon and Austan Goolsbee warned that undermining Fed autonomy could lift inflation and rates.
- With inflation still above the 2% goal, analysts expect the Fed to hold rates at its late‑January meeting as policymakers debate how quickly any cuts should follow.