The Federal Reserve's modus operandi through years of attacks from President Trump has been straightforward: Head down, do your job, don't get sucked into counterattacks.
- Fed chair Jerome Powell tossed that playbook aside in responding forcefully to the prospect of criminal charges over his stewardship of the Fed's building renovation.
The big picture: Some 36 hours after the shocking news broke, the strategy is working. Trump allies within the administration and on Capitol Hill are distancing themselves from a potential Powell prosecution.
- Several Congressional Republicans said that whatever disagreements they may have with Powell, he certainly isn't a crook.
- Other Trump allies point out that it is counterproductive to try to go after an official whose term is up in four months anyway — and who has the ability to muck up Trump's Fed ambitions by refusing to vacate his term as a governor at the central bank until it expires in 2028.
- Our colleague Marc Caputo reported Monday that Treasury Secretary Scott Bessent described the effort as a mess and wasn't briefed beforehand, and that a source said U.S. attorney for the District of Columbia Jeanine Pirro "went rogue."
Of note: Pirro herself even seemed to throw some cold water on the story, saying on X, "The word 'indictment' has come out of Mr. Powell's mouth, no one else's. None of this would have happened if [the Fed] had just responded to our outreach."
Between the lines: What we've seen in the last two days is, in effect, a rallying around the Fed that has happened before in challenging moments for the central bank.
- There are plenty of complaints to be made about the Fed's policy decisions and the secretive way it makes them. But at the end of the day, there's a deep cross-partisan consensus that you want skilled technocrats in charge of the nation's money supply rather than overt politicization.
- More than his predecessors, Powell has aggressively cultivated relationships in Congress, which has paid dividends in the shows of support that emanated from Capitol Hill since Sunday night — including from persistent Powell critics.
- Moreover, Powell has used the full weight of the Fed as an institution to make his case — unlike governor Lisa Cook, who hired personal lawyers to fight her attempted firing as Powell and the Fed itself have not weighed in.
What they're saying: "I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell's term," said North Dakota Sen. Kevin Cramer in a statement.
- "I think the Federal Reserve renovation may well have wasted taxpayer dollars, but the proper place to fix this is through Congressional oversight," said Pennsylvania Sen. Dave McCormick in a statement. "I do not think Chairman Powell is guilty of criminal activity."
The intrigue: Cramer and McCormick, both Republicans, were among several Senate Banking Committee members to express extreme skepticism of the criminal investigation.
- That's particularly ironic because the root of the inquiry is over whether Powell perjured himself before that very committee last June in addressing renovation cost overruns.
Flashback: If the last couple of days remind us of anything, it's a brief episode in January 2009 when it appeared Ben Bernanke's Senate confirmation for a second term as chair was in doubt amid blowback to financial bailouts.
- Then, Bernanke and allies in both parties aggressively worked the phones, cobbling together enough Senate "aye" votes to avoid an embarrassing and disruptive vote of no-confidence in the Fed's leadership.
The bottom line: The Fed plays the political game more subtly than most Washington institutions. But that doesn't mean it lacks skill.
