Fed Chair Jerome Powell Under Criminal Investigation

Trump's Endgame for the Fed

It’s been an eventful first few weeks of the new year—Nicolas Maduro’s capture in Venezuela, Minnesota’s National Guard deployment amid civil unrest, and renewed border chaos—so you’d be forgiven for missing this: Jerome Powell, chair of the Federal Reserve, is now under criminal investigation.

Wait, what? The head of the most powerful central bank on Earth is being investigated for... lying to Congress about a building renovation? You can’t make this stuff up.

Federal prosecutors are examining whether Powell misled lawmakers during testimony about the Fed’s headquarters renovation project. The project broke ground in 2022 with an estimated budget of $1.9 billion. By 2025, that figure had ballooned to $2.5 billion. During his June testimony before the Senate Banking Committee, Powell was asked about the cost overruns. Now, prosecutors want to know if he lied under oath.

Currently, there are no charges and no indictment. Fed members are being subpoenaed. An investigation does not mean guilt, and it certainly doesn’t mean removal. But make no mistake—this is a big deal.

Why?

Well, for one, in modern U.S. history—going back to the Fed’s creation in 1913—no sitting Federal Reserve chair has ever faced a criminal investigation.

Presidents have pressured the Fed before, of course. Truman went after William McChesney Martin. Nixon leaned on Arthur Burns. Trump himself spent his first term blasting Powell on social media, calling him everything from “a bigger problem than China’s Xi” to a “stubborn moron.”

But a criminal investigation? That’s never happened.

Trump's Fed Takeover

Powell himself clearly thinks this is a big deal too. He released a video message saying... drum roll... the White House is trying to intimidate him into influencing monetary policy. But, he added, he’s going to continue doing his job regardless.

Surprise, surprise—Trump’s behind this.

If you've been following our work, this shouldn't come as a shock. This investigation is just the latest move in what I've been showing you all year—Trump's systematic capture of the Fed.

Here's roughly how it went down:

In summer 2025, Trump installed Stephen Miran as a Fed Governor. If that name sounds familiar, it’s because Miran is the architect of what I’ve been calling Trump’s Reset—a coordinated dollar devaluation strategy. From his position as Fed governor, Miran now has a permanent vote on the Federal Open Market Committee (FOMC), giving him direct influence over interest rates and the Fed’s balance sheet. More importantly, he’s positioned to potentially become the next Fed chair when Powell’s term expires in May.

Then in August, Trump tried to fire Fed Governor Lisa Cook on mortgage fraud allegations. It was the first time in over a century that a president had attempted to remove a sitting Fed governor. Cook refused to resign and is now fighting Trump at the Supreme Court.

Throughout 2025, Trump kept up relentless public pressure on Powell to cut rates. And Powell caved. The Fed cut rates multiple times—September, October, December—despite inflation still running above their 2% target.

But it wasn’t enough for Trump. So when Powell wouldn’t go further, Trump went looking for a way to force him out.

Curiously, it seems Trump’s been marinating on this idea for a while. Back in August 2025, he posted this on his Truth Social account:

Jerome “too late” Powell must now lower the rates... I am though considering allowing a major lawsuit against Powell to proceed because of the horrible and grossly incompetent job he’s done in managing the construction of the Fed buildings. $3 billion for a job that should have been a $50 million fix-up. Not good.

What's Really Going On

But here’s what doesn’t make sense—at least on the surface.

Powell’s term expires in four months. Trump will nominate the next Fed chair anyway. And everyone knows that any criminal investigation will take much longer than four months to resolve.

So what’s the point?

I see two possibilities.

The first is that Trump is trying to force Powell’s hand in the short term—either get him to resign immediately or pressure him into doing his bidding.

Not because he’s interested in fighting inflation and lowering costs for Americans. No. That doesn’t match his actual policy. You can’t fight inflation with easy money (or tariffs).

No, what he really wants is to juice the economy heading into the 2026 midterms—higher wages, soaring stock prices, a short-term boom that looks and feels like prosperity. Then there’s the other problem: out-of-control government debt service costs. With $38.6 trillion in debt, every percentage point cut saves hundreds of billions in annual interest payments. And importantly for the longer-term strategy, he wants to weaken the dollar as part of his Reset plan.

The second possibility is also interesting—Trump is sending a message to whoever comes next. It doesn’t actually matter whether Powell caves or not. What matters is that the threat is now real. The next Fed chair—whoever that ends up being—will see exactly what happens when you don’t do what the president wants.

So is this another “dangerous blow” to Fed independence coming from team Trump?

Maybe so—if “Fed independence” were ever real. But the facts tell a different story. For most of its history, the Fed has marched in step with whoever’s in the White House. Economist Robert Weintraub, after looking at the 1950s through the ‘70s, put it plainly: “the dominant guiding force behind monetary policy is the President.”

What’s different now is that Trump isn’t even pretending. Past presidents pressured the Fed behind closed doors. They complained. They twisted arms. But they maintained the facade.

Trump’s blowing that up. And for a guy who openly talks about seizing Greenland and annexing Canada, dropping all pretense about Fed independence is perfectly on brand.

Of course, the problem is that rate cuts alone won’t do much good for Trump’s goals. Normally, the Fed only controls short-term rates directly—the federal funds rate. Long-term rates like the 10-year Treasury yield are set by market forces. But there’s a workaround: if the Fed starts buying long-term bonds in massive quantities—quantitative easing, money printing—it can artificially suppress those long-term yields. That’s what Trump needs. Not just rate cuts. The money printer running full blast.

And that’s exactly why he’s taking over the Fed.

Now, you may like Trump and think he’s god-sent for America’s troubles, and you can doubt everything I’m saying here about inflation and the rest of it. But look at what’s happened since the day he stepped into office. Gold is up 81% and silver is up 210% since his inauguration. That should tell you everything you need to know about how good he’s been for “fighting inflation.”

Regards,

Lau Vegys

P.S. As I showed you back in December, the Fed just restarted the money printer—buying billions in Treasury bills with no stated end date. They’re calling it “reserve management,” but it’s stealth money printing that’s paving the way for full-scale QE. And now, with Trump systematically capturing control of the Fed through intimidation and personnel moves, that transition is all but guaranteed. That’s why a big portion of our Crisis Investing portfolio is focused on precious metals miners—many of which Doug himself owns.