US Attorney for the District of Columbia Jeanine Pirro did not seek sign-off from her bosses at the US Department of Justice before subpoenaing the US Federal Reserve and has no plans to back down from an investigation into Chairman Jerome Powell, a person familiar with the matter said.
The probe elicited objections from lawmakers and comments from US President Donald Trump that suggest he was trying to distance himself from the issue.
Nonetheless, Pirro, a former Fox News host who was confirmed as US attorney five months ago, plans to forge ahead, said the person, who asked not to be identified publicly discussing the sensitive situation.
Photo: Reuters
Investors are doubtful of her success. While US assets initially sold off on news of the investigation in early trading on Monday, stocks and bonds bounced back by the end of the day.
That suggests traders think Republicans would find ways to dial back the probe given the critical importance investors assign to a Fed that is free from political influence.
US Senator Thom Tillis, a key Republican member on the Banking Committee who is not running for re-election, vowed to oppose any Trump nominees to the Fed until the matter is resolved.
US Senate Majority Leader John Thune said that the threat of a legal battle with the Fed could make confirming future nominees “challenging.”
Axios reported that US Secretary of the Treasury Scott Bessent warned Trump that the investigation had created a mess and could be bad for financial markets.
Trump, meanwhile, told NBC News on Sunday that “I don’t know anything about” the probe into Powell.
All that points to major obstacles in the offing for Pirro.
US Federal Housing Finance Agency Director Bill Pulte was a driving force behind the effort to investigate the Fed, Bloomberg News has reported.
Pulte on Monday he did not know anything about the subpoenas.
Pirro’s office declined to comment. A representative for Attorney General Pam Bondi also declined to comment.
The examination is tied to Powell’s June congressional testimony on renovations of the Fed’s headquarters. However, on Sunday, the Fed chair said it was really intended to pressure policymakers who refused to go along with Trump’s very public insistence that interest rates should be lower to support the housing market and economy.
In a post on X on Monday night, Pirro said her office had “contacted the Federal Reserve on multiple occasions to discuss cost overruns and the chairman’s congressional testimony, but were ignored, necessitating the use of legal process — which is not a threat.”
“The word ‘indictment’ has come out of Mr. Powell’s mouth, no one else’s. None of this would have happened if they had just responded to our outreach,” she added.
The Fed did not immediately respond to a request for comment on her post.
In related news, global central bank officials are working on a statement to show solidarity with Powell, a person familiar with the matter.
The joint statement is expected to be issued under the Bank for International Settlements (BIS) banner and would be open for all central banks to sign, said the person, who asked not to be identified.
The statement could come as early as yesterday, as monetary chiefs take time to sort the language due to time-zone differences, the person said.
The BIS did not have an immediate comment when contacted by Bloomberg.
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