President Trump escalated his criticism of Federal Reserve Chair Jerome Powell, calling him either "incompetent" or "crooked" following a Justice Department criminal investigation into the central bank's headquarters renovation project. The sharp rebuke came as Trump departed the White House for an economic speech in Detroit on Tuesday.

Trump's Direct Attack on Powell

"He's billions of dollars over budget, so, either he's incompetent or he's crooked," Trump told reporters. "I don't know what he is, but he certainly doesn't do a very good job." The comments represent a dramatic escalation in the administration's attacks on the Federal Reserve and raise fresh concerns about the institution's independence.

Justice Department Investigation Details

The criminal probe centers on the Federal Reserve's headquarters renovation project and Powell's congressional testimony regarding the matter. Powell revealed on Sunday that the Justice Department had served the Fed with grand jury subpoenas related to the investigation, which was first disclosed over the weekend.

Bipartisan Congressional Pushback

The investigation has prompted significant opposition from Republican senators, threatening to complicate Trump's efforts to nominate Powell's successor. Key congressional responses include:

Former Officials Condemn Investigation

Three former Federal Reserve chairs and four former Treasury secretaries from both Republican and Democratic administrations issued a joint statement condemning the investigation. They declared that "it has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success."

Powell's Response and Fed Independence Concerns

Powell characterized the renovation investigation as "pretexts" for broader political pressure regarding interest rates. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation," he stated on Sunday.

Trump had previously told NBC News he didn't know about the subpoenas, appearing to distance himself from the investigation. However, he has consistently criticized Powell and demanded lower interest rates, stating he won't select a new chair unless they commit to rate reductions. Powell's term as chair ends in May, and Trump is currently considering potential successors.

A coalition of major international central banks has rallied behind the US Federal Reserve, issuing a joint statement that underscores the critical importance of central bank independence amid mounting political pressure on Fed Chair Jerome Powell. The unprecedented show of solidarity from the global central banking community comes as tensions escalate between the Trump administration and the Federal Reserve leadership.

International Support for Fed Independence

On January 13, the European Central Bank issued a statement expressing "full solidarity" with the Federal Reserve System, emphasizing that central bank independence serves the public interest by supporting price, financial, and economic stability. The statement followed remarks made by Powell on January 11 and highlighted the critical nature of safeguarding central bank independence while respecting the rule of law and democratic accountability.

The joint statement garnered support from a broad coalition of central banking institutions:

Escalating Political Tensions

The international support comes amid significant pressure on Powell from President Trump, who has repeatedly criticized the Fed chair and demanded swift rate cuts. According to The New York Times, tensions have escalated following the opening of a criminal investigation by the US attorney's office in the District of Columbia into Powell over renovations to the Fed's historic office buildings and whether he misled Congress about the project.

Powell has indicated that the administration threatened him with a possible criminal indictment, a move he linked to the Fed's refusal to align interest-rate decisions with the president's preferences. The Fed chair has maintained that the central bank sets rates based on economic evidence and public interest, warning that political intimidation could compromise monetary policy independence.

Defense of Powell's Leadership

The international central banking community offered strong support for Powell's conduct in office. According to the joint statement, Powell has carried out his role with integrity, remained focused on his mandate, and demonstrated consistent commitment to the public interest. International counterparts described him as a respected colleague held in high regard by those who have worked with him.

Critics have expressed concerns that any attempt to remove or legally target the Fed chair would undermine the central bank's autonomy, potentially compromising the institution's ability to make independent monetary policy decisions based on economic fundamentals rather than political considerations.

Reaffirming Core Principles

The European Central Bank reinforced its position through social media channels, reiterating that central bank independence remains a cornerstone of stability and is vital for the people these institutions serve. The coordinated international response represents a rare instance of global central banks collectively addressing political pressure on a peer institution, highlighting the perceived threat to established norms of central banking independence.