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Highlights
- Rep. Anna Paulina Luna has criminally referred Jerome Powell over the Federal Reserve renovation project.
- This comes as Powell faces pressure from Trump to cut rates.
- Trump has reportedly considered sacking Powell.
Federal Reserve Chair Jerome Powell continues to feel the heat as U.S. President Donald Trump pushes for a Fed rate cut. This time, one of the president’s allies in Congress has criminally referred the Fed Chair to the U.S. and could now face a criminal investigation.
Jerome Powell Faces The Possibility Of A Criminal Investigation
According to a FOX News report, U.S. representative Anna Paulina Luna is referring the Fed Chair to the Department of Justice for criminal charges. The U.S. lawmaker is accusing him of two instances of lying under oath.
Luna said in the letter to the DOJ that on June 25, Jerome Powell provided testimony under oath before the U.S. Senate Committee on Banking regarding the renovation of the Federal Reserve’s Eccles Building. She added that the Fed Chair made several materially false claims.
For the second instance, she stated that in a letter to the Office of Management and Budget (OMB) Director Russell Vought, the Fed Chair falsely described the changes that raised the renovation cost from $1.9 billion to $2.5 billion as minor. She noted that this wasn’t the case as documents that congressional investors reviewed showed that these changes were not minor.
These claims come amid the push from Trump and his allies for Jerome Powell to cut rates. The president has specifically urged the FOMC to make a 300-basis-point Fed rate cut. He believes a Fed rate cut is long overdue, given that inflation is currently low.
Severity Of Perjury Claims Against The Fed Chair
The perjury claims are severe, as Jerome Powell could face up to five years in prison in addition to fines. It remains unclear whether the criminal investigation could serve as sufficient grounds for Trump to fire the Fed Chair, something the president has reportedly considered.
However, the president said he will unlikely fire Powell but alluded to the case of the alleged fraud as something that could make him resign or leave forcefully. Trump has continually criticized the Fed Chair, due to his hesitation to cut rates.
Meanwhile, it is worth noting that the odds for a Fed rate cut have surged as Jerome Powell’s future hangs in the balance. As CoinGape reported, there is now a 56.1% chance that the Fed lowers interest rates in September.
However, regardless of what happens between now and the July 30 FOMC meeting, it is unlikely that the Fed will lower rates at the upcoming meeting. This is due to the June U.S. job data, which showed that the country’s labor market remains solid. CME FedWatch data shows there is a 97.4% chance that odds will remain unchanged following this July meeting.
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