Trump’s D.O.J. Went After the Fed. It Backfired.

From the New York Times, I'm Natalie Kitroweth. This is The Daily. Even for an administration that has taken revenge to an extreme, the decision to open a criminal investigation into Fed chairman Jerome Powell has stunned the worlds of business and politics. Today, my colleagues Colby Smith and Glenn Thrush explain how the investigation came about, the panic it unleashed, and why it might have made the Fed chair stronger than ever. It's Thursday, January 15. Glenn, Colby, welcome to the show. It's great to have you here. Thank you. Thanks. It's good to be back. So for the past several months, we've been tracking this simmering conflict between president Trump and federal reserve chair Jerome Powell. Trump has been trying to push Powell for a while now to lower interest rates as fast as possible, and Powell has been resisting. And then in the past few days, really, that fight entered a new and unprecedented phase. Federal prosecutors opened a criminal investigation into Powell, and that set off a firestorm in Washington. You two have been covering this moment. Glenn, from your perch as our justice department reporter, Colby as our fed reporter. And I wanna start by asking you, Colby, to help us get up to speed on how exactly we got from simmering conflict to this extremely tense moment. So it all centers around interest rates. As you mentioned, Trump has been all over the Fed for not lowering borrowing costs as fast as he would like. They've lowered interest rates three times over the course of three meetings, but it hasn't been enough for the president. He is facing a lot of pressure from constituents who are worried about affordability issues, are worried about high inflation, about a weakening labor market, and all of this is making Trump feel like the Fed needs to be doing more. And standing in the way of that is Chair Powell. Right. We've seen Trump put a ton of pressure on Powell personally. He's threatened to fire him. He's called him names. And all of that has really not done all that much, if anything, it seems, to make Powell move on interest rates. That's right. But then, over the summer, he found a new angle, and what he focused on was this renovation project that was happening at the Fed's headquarters in Washington. There had been massive cost overruns. This thing was running about $700,000,000 over budget, and it was looking like it was gonna cost somewhere in the ballpark of 2 and a half billion dollars. And when Trump saw this, he seized on it and used it to go after Powell and say, this Fed chair must be incompetent and mismanaging this project, or maybe something like fraud was happening here. Okay. So I've read a lot about this renovation, and it does sound like it was extremely costly and did go way over budget. But do we have any indication that there was anything criminal …