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A US judge has blocked subpoenas issued by Donald Trump’s Department of Justice to the Federal Reserve in a major blow to its criminal investigation into chair Jay Powell and a victory for the central bank.
James Boasberg, a US federal judge in the District of Columbia, wrote in an opinion published on Friday that a “mountain of evidence suggests that the dominant purpose” of the subpoenas was to “harass Powell to pressure him to lower rates”.
“There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the president or to resign and make way for a Fed chair who will,” Boasberg wrote.
The judge said the federal government had “produced essentially zero evidence” to suspect Powell of a crime, adding: “Its justifications are so thin and unsubstantiated that the court can only conclude that they are pretextual.”
In a fiery press conference shortly after the opinion was published, Jeanine Pirro, US attorney for the District of Columbia, tore into Boasberg, who she described as an “activist judge”, and vowed to appeal against the ruling.
US prosecutors first launched a criminal investigation into Powell over the Fed’s $2.5bn renovation of its headquarters in January.
Powell at the time strongly rejected the “unprecedented action” from the DoJ, saying it was a pretext to rein in the Fed’s independence to set interest rates and was part of threats and pressure from the White House.
Trump has repeatedly railed against Powell, whom he first nominated to be Fed chair in 2017, for failing to cut interest rates more aggressively.
The Federal Reserve declined to comment on Friday.
The White House did not immediately respond to a request for comment.
This is a developing story.