Trump Team Ramps Up Attack on Fed's Powell With Criminal Indictment Threat

U.S. President Donald Trump's administration has ramped up its pressure campaign on the Federal Reserve, threatening to indict Chair Jerome Powell over comments to Congress about a building renovation project, an action Powell called a "pretext" to gain more influence over interest rates Trump wants cut dramatically.

The latest development in a long-running effort by Trump for greater control over the Fed had immediate fallout, with Republican Senator Thom Tillis, a member of the Senate Banking Committee that vets Presidential nominees for the Fed, saying the threatened indictment puts the Department of Justice's "independence and credibility" in question. Tillis said he would oppose any Trump nominees to the Fed, including the coming choice of successor to Powell as chair, "until this legal matter is fully resolved."

At stake is the independence of the Fed - the world's most important central bank - to set U.S. monetary policy without undue influence by elected officials like Trump who would prefer cheaper borrowing costs for their political appeal.

Powell - elevated to Fed chair by Trump in 2018 - will complete his term as Fed leader in May, but he is not obligated to leave, and a number of analysts saw the latest move by the administration as adding to the chances of him staying on in defiance.