US Senate minority leader calls probe into Fed chief Trump's attempt to 'cannibalize' central bank

By Diyar Guldogan

WASHINGTON (AA) - US Senate Minority Leader Chuck Schumer on Monday slammed an alleged criminal investigation involving Federal Reserve Chairman Jerome Powell, accusing President Donald Trump of attempting to undermine the central bank's independence for political gains.

"Anyone with two eyes and half a brain knows exactly what this criminal probe represents: a brazen attempt by Donald Trump to cannibalize the Fed's independence. The allegations behind this probe are clearly bogus," Schumer said on the Senate floor.

His remarks came a day after Powell said he was facing a criminal investigation, but denied any wrongdoing, asserting that the move was linked to political pressure over interest rate policy.

Schumer dismissed claims that the investigation was related to building renovations, calling this a pretext. Instead, he accused Trump of "weaponizing" the Department of Justice (DOJ) to intimidate the Fed and influence monetary policy.

"This is another ominous, troubling step toward the magnification of America's monetary policy," he said.

The New York Democrat warned that any effort to pressure the Fed through the threat of criminal investigation could have serious economic consequences, including higher interest levels and mortgage rates.

Schumer called for DOJ officials to testify before the Senate to explain the basis for the investigation and urged the upper chamber to block any future Trump nominees to the Fed while the matter remains unresolved.

"Donald Trump is clearly angry that his own presidency has been a disaster for our economy, so he's looking for a scapegoat, and he thinks Jerome Powell can be one. He's made a big mistake. No one's going to fall for that bull, but Jay Powell and the Fed," he added.

Jeanine Pirro, the US Attorney for the District of Columbia, whose office is heading the investigation, claimed that the Fed had ignored multiple attempts "to discuss cost overruns and the chairman’s congressional testimony."

In remarks on US social media company X, she said that the lack of response from Powell and the Fed had necessitated "the use of legal process—which is not a threat."

"The word “indictment” has come out of Mr. Powell’s mouth, no one else’s. None of this would have happened if they had just responded to our outreach.

"None of this would have happened if they had just responded to our outreach. This office makes decisions based on the merits, nothing more and nothing less," she added.

Powell has repeatedly clashed with Trump over interest rates, with the president publicly urging the Fed to sharply cut borrowing costs.