Jerome Powell

Renovation of the Fed's historic buildings in Washington exceeds its initial budget by several hundred million dollars, bringing the project's cost to approximately 2.5 billion according to widely cited estimates. The matter prompts congressional hearings, Republican criticism of a project considered extravagant, and a public confrontation between Trump and Powell during a site visit.

State of the evidence

Documented

The Department of Justice opens a criminal investigation and issues grand jury subpoenas seeking documents relating to Fed renovations and Powell's Senate testimony. Powell makes the case public in January 2026, maintaining that it is a pretext to force him to cut rates or resign.

Attribution

Directly implicated

Following Donald Trump's return to the White House, he repeatedly attacks Powell, demands substantial rate cuts, raises the possibility of replacing him or naming a successor early, and challenges monetary policy. A Reuters survey in July 2025 finds that more than 70% of economists questioned consider Fed independence to be under threat.

State of the evidence

Documented

Attribution

Political responsibility

The Fed begins its easing cycle with an unusual 50-basis-point cut less than seven weeks before the 2024 presidential election. Donald Trump and other Republicans had warned that a pre-election cut might be perceived as politically motivated, reigniting debate over central bank neutrality.

State of the evidence

Documented

Attribution

Directly implicated

Following the 2021 misdiagnosis, the Fed raises its policy rate by more than five percentage points in approximately sixteen months. At Jackson Hole in August 2022, Powell states that restoring price stability will likely entail weaker growth, a less dynamic labour market and 'pain' for households and businesses. Markets fall sharply and criticism focuses on recession and unemployment risks.

State of the evidence

Documented

Attribution

Directly implicated

Following Silicon Valley Bank's collapse, the review led by Vice-Chair Michael Barr concludes that Fed supervisors failed to sufficiently understand the bank's vulnerabilities, did not act quickly enough and that the regulatory 'tailoring' approach adopted after the 2018 law had lowered standards and encouraged less assertive supervision. Powell chaired the Board during this period.

State of the evidence

Documented

Powell announces a major overhaul of monetary strategy: the Fed will target average inflation of 2% and tolerate moderately higher inflation after lengthy periods of undershooting, while responding less automatically to low unemployment. After inflation surges in 2021–2022, lawmakers and economists accuse the framework of contributing to an excessively delayed response.

State of the evidence

Documented

Attribution

Directly implicated

In 2021, trading by several senior Fed officials during the Covid crisis triggers a conflict-of-interest scandal. Powell orders a comprehensive review of the rules, which are subsequently tightened. His own circumstances are examined because an adviser to the family trust executed five transactions during a sensitive period.

State of the evidence

Documented

Attribution

Institutional responsibility

For much of 2021, Powell and the Fed describe surging prices as mainly transitory, linked to bottlenecks and reopening. As inflation persists and broadens, Powell states on 30 November that it is time to 'retire' the term. The episode becomes one of the main criticisms of his tenure: the Fed allegedly underestimated inflation and delayed tightening.

State of the evidence

Documented

Attribution

Directly implicated

At a Senate hearing, Senator Elizabeth Warren accuses Powell of weakening a series of prudential protections introduced after the financial crisis and calls him a dangerous man at the head of the Fed, announcing her opposition to his reappointment.

State of the evidence

Documented

Attribution

Directly implicated

Powell leads the Fed's unprecedented response to the Covid shock: a 150-basis-point rate cut in March, open-ended asset purchases and multiple Treasury-backed credit facilities. The measures rapidly stabilise markets, but lawmakers and economists criticise the gap between effective support for financial markets and the slow launch of programmes such as Main Street and the Municipal Liquidity Facility.

State of the evidence

Documented

Attribution

Directly implicated

The Fed entrusts BlackRock with managing securities purchase programmes, notably corporate bonds, while the company itself manages trillions of dollars in assets potentially affected by these interventions. The appointment prompts criticism over conflicts of interest, concentration of financial power and transparency.

State of the evidence

Documented

After still signalling further increases in late 2018, Powell's Fed reverses course and cuts rates three times in 2019, citing the global slowdown, trade tensions and risks to the expansion. The reversal fuels debate over the Fed's communication and its ability to anticipate the economic cycle.

State of the evidence

Documented

Attribution

Directly implicated

On 16 and 17 September 2019, repo rates and the effective federal funds rate surge unexpectedly; SOFR exceeds 5% and the federal funds rate rises above its target range. The New York Fed has to intervene urgently through repo operations. The episode triggers debate over the earlier reduction in reserves and the Fed's estimate of adequate liquidity levels.

State of the evidence

Documented

Attribution

Institutional responsibility

Under Powell, the Fed raises interest rates in December 2018 despite several weeks of volatility, Donald Trump's calls to halt tightening and fears of a slowdown. Equity markets and bond yields fall sharply after the press conference, with some investors fearing that the Fed will excessively slow the economy.

State of the evidence

Documented

Attribution

Directly implicated