FED

A federal district court judge denied a Department of Justice motion asking the court to reconsider its quashing of subpoenas aimed at U.S. Federal Reserve Chair Jerome Powell, pictured in January at a press conference, and the Fed Board. File Photo by Annabelle Gordon/UPI | License Photo

April 3 (UPI) — A federal judge on Friday refused a Department of Justice request for him to reconsider his earlier ruling to block grand jury subpoenas it issued to Fed Chairman Jerome Powell.

U.S. District Judge James Boasberg on Friday said he would not lift his block on subpoenas that the Justice Department issued to board of the Federal Reserve regarding the $2.5 billion renovation of the Fed’s complex in Washington, D.C.

The judge had previously blocked the subpoenas because, he said, they had nothing to do with a Justice Department probe about the renovations, but rather were intended to pressure Powell into adjusting interest rates, as President Donald Trump had been chiding him to do for months.

“On March 11, 2026, this Court issued a Memorandum Opinion and Order that quashed the Government’s subpoenas directed to the Board of Governors of the Federal Research System,” Boasberg wrote in a response to the Justice Department request that was filed on Friday.

“The Government promptly moved for reconsideration of that decision,” he wrote. “As its cursory brief neither offers new evidence nor points to any material error, the Court will deny the Motion.”

The DOJ launched its criminal investigation into the Fed’s renovation budget, which Powell at the time called “pretexts” to punish him for not setting interest rates based on Trump demands.

Boasberg, in his response to the Justice when he blocked the subpoenas said that the government “has produced essentially zero evidence to suspect Chair Powell of a crime.”

The Justice Department later acknowledged when appealing Boasberg’s quashing of the subpoenas that it did not have evidence that a crime had been committed, instead saying that there were “1.2 billion reasons for us to look into it.”

A United States federal judge has once again batted down a pair of subpoenas from the administration of President Donald Trump seeking information about Jerome Powell, the chairman of the Federal Reserve, the country’s central bank.

In a brief, six-page opinion published on Friday, Judge James Boasberg rejected the Department of Justice’s motion to reconsider his earlier ruling rejecting the subpoenas.

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“The Government’s arguments do not come close to convincing the Court that a different outcome is warranted,” Boasberg wrote.

On March 13, Boasberg, a judge for the federal court in the District of Columbia, nullified the subpoenas on the basis that they were issued for an “improper purpose”: to pressure Powell into compliance with the president’s demands.

Trump and Powell — an appointee from the president’s first term — have been at loggerheads since the Republican leader returned to the White House in January 2025.

Although the Federal Reserve is an independent government agency, not subject to political demands, Trump has repeatedly called on the bank to slash interest rates, and he has denounced Powell as “incompetent”, “crooked” and a “fool” for not following suit.

For months, pressure had been building from the Trump White House to investigate Powell and push him prematurely from his job as Federal Reserve chair. Powell’s term is slated to expire in May.

Much of the Trump administration’s focus has fallen on renovations to the Federal Reserve’s historic 1930s buildings in Washington, DC, which have gone over budget.

The administration has pointed to the cost overruns as evidence of malfeasance.

Last July, for instance, Trump appointee William Pulte called on Congress to investigate Powell for “political bias” and “deceptive” testimony related to the renovation project.

The following month, Trump posted on his platform Truth Social that he was considering “a major lawsuit against Powell” in response to “horrible, and grossly incompetent” work on the renovations.

The pressure reached a climax on January 11, when Powell made a rare statement announcing he was under a Justice Department investigation over the renovation project. He dismissed the probe as a “pretext” to undermine the Federal Reserve’s leadership over monetary policy.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said.

The Federal Reserve has since sought to have the subpoenas into Powell’s behaviour tossed.

Boasberg sided with the central bank in his initial ruling, and in Friday’s opinion, he called the Trump administration’s efforts to change his mind insufficient.

The Justice Department had argued that it does not need to produce evidence of a crime to seek a grand jury subpoena.

Boasberg agreed with that point, but he said subpoenas were also subject to a legal standard that bars them from being issued for “improper” purposes.

“The subpoena power ‘is not unlimited’ and may not be abused,” Boasberg wrote, citing court precedent.

He therefore ruled that the lack of evidence overall against Powell was relevant to the legality of the subpoenas.

“The controlling legal question is what these ‘subpoena[s’] dominant purpose’ is: pressuring Powell to lower rates or resign, or pursuing a legitimate investigation opened because the facts suggested wrongdoing,” Boasberg said.

“Resolving that question requires probing whether the Government’s asserted basis for the subpoenas — suspicions of fraud and lying to Congress — is colorable or tenuous. That inquiry, in turn, means asking how much evidence there is to back up the Government’s assertions.”

Boasberg underscored that he has seen no suggestion that Powell committed criminal wrongdoing and pointed to the long list of statements Trump has made attacking the Federal Reserve chair, suggesting an ulterior motive.

“The Government’s fundamental problem is that it has presented no evidence whatsoever of fraud,” he concluded.

Friday’s ruling is likely to set the stage for the Trump administration to appeal. US Attorney Jeanine Pirro has previously denied any political motivation for the investigation.

She has also asserted that Boasberg is “without legal authority” to nullify the subpoenas.

The United States Federal Reserve will hold interest rates steady as the labour market cools and prices on goods and services surge following the US and Israel’s joint strikes on Iran.

The central bank will maintain its benchmark rate at 3.5–3.75 percent, consistent with the Fed’s decision last month, when it also held rates steady.

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“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the US economy are uncertain,” the central bank said in a statement announcing its policy decision and referring to its Federal Open Market Committee.

“The Committee is attentive to the risks to both sides of its dual mandate.”

Holding rates steady was in line with estimates. CME FedWatch, a tool that tracks monetary policy decisions, forecast that there was a 99 percent chance that rates would hold steady.

The stall comes after three rate cuts in 2025.

Global gripes

Consumers are also facing the repercussions of US President Donald Trump’s trade and military policies in their daily expenses.

“Despite meaningful progress on inflation in 2024, Trump’s tariffs have stalled progress and kept inflation persistently above the Fed’s target. Wholesale prices are running hot as service prices surge, and now, Trump’s war in Iran is rocking commodity markets around the globe,” Elizabeth Pancotti, managing director of policy and advocacy at Groundwork Collaborative, an economic think tank, said in comments provided to Al Jazeera.

Last month, the US Supreme Court ruled against the president for his use of the International Emergency Economic Powers Act (IEEPA). The high court said the president exceeded his authority and that the tariffs imposed under that order must be refunded. However, the president then imposed new tariffs not covered by IEEPA.

The White House announced a 15 percent tariff through Section 122, which allows the president to impose tariffs for 150 days. Those changes were reflected in the producer price index report released by the US Department of Labor’s Bureau of Labor Statistics on Wednesday.

Wholesale prices rose by 0.7 percent for the month, marking the biggest one-month surge in a year. Goods prices rose 1.1 percent overall after tumbling for two months. Energy prices rose by 2.3 percent, with the cost of gas or petrol rising by 1.8 percent. Those costs are expected to get higher as tensions rise in the Strait of Hormuz following joint US-Israel strikes on Iran in late February and the subsequent retaliation.

“In the near term, higher energy prices will push up overall inflation; however, it is too soon to know the scope and duration of the potential effects on the economy,” Fed Chair Jerome Powell told reporters.

In the last month, petrol prices have jumped for US consumers. The average price for a gallon of regular gasoline is $3.84, up from $2.92 this time last month.

“The Fed’s inflation worries extend beyond weathering a fleeting wave of one-off price hikes associated with tariffs and, more recently, an energy price spike,” Stephen Stanley, chief US economist at Santander US Capital Markets, told the Reuters news agency.

Labour market stalls

Holding rates steady also comes as the job market stagnates. The latest jobs report, which was released earlier this month, showed that the US economy lost 92,000 jobs, with unemployment rising to 4.4 percent.

Meanwhile, the Job Openings and Labor Turnover Survey, or JOLTS report, which came out last week, showed 6.9 million open jobs in the US, unchanged from the month prior. That shows that employer hiring has stalled and that those who have jobs are seldom leaving for new ones.

“This might be one of the toughest moments in recent memory for the Federal Reserve’s Open Market Committee,” Michael Linden, Senior Policy Fellow at the Washington Center for Equitable Growth, said in remarks provided to Al Jazeera. “Recent data has revealed that economic growth in the back half of last year was extremely weak, the labour market seems to be on the precipice of disaster, and prices keep rising faster than anyone feels comfortable with.”

Political undercurrents

Wednesday’s decision is the second-to-last one of current Fed Chair Powell, whose term is up in May. Powell, who was first appointed by Trump during his first administration, has been a target of Trump’s scorn and criticisms for not cutting interest rates fast enough.

“When is ‘Too Late’ Powell lowering INTEREST RATES?” Trump posted on his social media platform Truth Social on Wednesday morning ahead of the decision.

Previously, Trump said he would not nominate someone to lead the central bank unless the nominee agreed with his position.

“Anybody that disagrees with me will never be the Fed Chairman!” Trump said in a post on Truth Social in December.

“We at the Fed will continue to do our jobs with objectivity, integrity and deep commitment to serve the American people,” Powell told reporters.

Trump’s nominee to succeed Powell, Kevin Warsh, has his nomination in flux as Republican Senator Thom Tillis said he would not vote to advance any of Trump’s nominees to the central bank until a criminal probe into the current chairman, Powell, is closed.

Tillis sits on the Senate Banking Committee, which vets nominees for the central bank, including Warsh. He said he will not approve Trump’s Fed nominees until the probe of Powell is closed. The criminal probe of Powell centres on Fed building renovations after a judge quashed grand jury subpoenas and called the investigation a pretext to pressure the central bank to lower interest rates.

If Warsh has not been confirmed by the Senate in time for the Fed’s June 16–17 meeting, Powell would continue to lead the rate-setting Federal Open Market Committee.

“If my successor is not confirmed by the end of my term as chair, I would serve as chair pro tem until he is confirmed. That is what the law calls for,” Powell said.

“On the question of whether I will leave while the investigation is ongoing, I have no intention of leaving the board until the investigation is well and truly over with transparency and finality.”

March 18 (UPI) — The Federal Reserve announced that it is leaving its benchmark interest rate untouched Wednesday in its first Federal Open Market Committee statement since the start of the war with Iran.

The Fed’s benchmark interest rate remains at a 3.5% and 3.75% range as the committee held on to its projection of at least one rate cut coming this year.

“Available indicators suggest that economic activity has been expanding at a solid pace,” the FOMC statement said. “Job gains have remained low and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated.”

As for the war in Iran, the statement said its impact on the U.S. economy is “uncertain.”

The Fed continues to pursue monetary policies it believes will bring the rate of inflation down to 2%. In its statement it said it is “committed to supporting maximum employment,” in pursuit of its target.

Economic reports that inform the Fed’s decision have indicated pressures from inflation remain and economic growth has slowed.

Wednesday’s announcement comes on the heels of a producer price index report earlier in the day that showed the largest increase to the index for final demand goods since August 2023.

Last week, the U.S. Bureau of Labor Statistics reported that nonfarm payrolls fell by 92,000 in February. The unemployment rate increased to 4.4%.

These reports have economists and traders cooling on the potential for interest rate cuts. Eugenio Aleman, chief economist at Raymond James, said in a statement that the wholesale inflation report on Wednesday, “likely reinforces a hold decision.”

Data from the producer price index report predates the beginning of the war with Iran.

March 13 (UPI) — A federal judge this week quashed subpoenas the Department of Justice had issued to Federal Reserve Chair Jerome Powell because they were issued to pressure him into adjusting interest rates.

Judge James Boasberg redressed the DOJ for the subpoenas, saying that their purpose had nothing to do with a probe about renovations at the Federal Reserve in Washington, D.C.

The DOJ in January launched a criminal investigation into Powell’s testimony last year about the renovations, which Powell at the time said were “pretexts” to punish him and the Fed after they did not set interest rates at levels demanded by President Donald Trump.

“The Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual,” Boasberg wrote in the opinion.

The department in January issued grand jury subpoenas in reference to Powell’s comments about the multi-year project to renovate the Fed’s office buildings during his June 2025 testimony before the Senate Banking Committee.

During a tour of the renovations, Powell disputed Trump’s over-estimates of the renovation’s cost, and threatened to sue him for the “horrible and grossly incompetent job” Powell had done on the project.

Overall, however, Trump has repeatedly ripped into and mused about firing Powell, which he cannot do, because the Fed chair has repeatedly said that interest rate changes would be dictated by only the market, rather than the preferences of any one person.

In the opinion, which was unsealed Friday, Boasberg said he blocked the subpoenas because “a mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning.”

WASHINGTON — A federal judge on Friday quashed Justice Department subpoenas issued to the Federal Reserve in January, a severe blow to an investigation that has already attracted strong criticism on Capitol Hill.

Judge James Boasberg said that a “mountain of evidence suggests” that the purpose of the subpoenas was simply to pressure the Fed to cut its key interest rate, as President Trump has repeatedly demanded.

Fed Chair Jerome Powell revealed the investigation Jan. 11, prompting Senator Thom Tillis, a North Carolina Republican to block consideration of Trump’s pick to replace Powell as Fed chair when his term expires May. 15.

Rugaber writes for the Associated Press.