Trump’s investigation of Powell is also a warning to the next Fed chair

Subscribe to enjoy similar stories. The criminal investigation into Federal Reserve Chair Jerome Powell isn’t ultimately about the Fed’s headquarters, or Powell, or even interest rates. It’s about power.

President Trump intends to take control of the central bank, no matter what the law or the courts say. In that sense, the investigation is also a message to whoever succeeds Powell, likely either Trump adviser Kevin Hassett or former Fed governor Kevin Warsh. Both claim they will be independent.

But if either sets interest rates contrary to Trump’s desires, they can expect the same treatment as Powell. That’s a powerful incentive to stay in line. Since returning to power a year ago, Trump has steadily obliterated the lines that once separated the president from other sources of federal authority.

He fired Democratic members of agencies such as the Federal Trade Commission contrary to law, sacked career officials in justice, defense and law enforcement deemed insufficiently loyal, and trampled on Congress’ authority over spending and revenue. The Fed was an exception. Because politicians always want lower interest rates, which can lead to inflation, the Fed, by law and tradition, operates independently from the president and Congress.

Presidents have pressured the Fed anyway, but usually behind closed doors, while publicly claiming to respect its independence. Not Trump. He insists he should have some say over interest rates, and many in his administration consider independence antithetical to the president’s supreme authority over the executive branch.