Fed watchdog clears Powell in $2.4B renovation probe; Trump demands resignation, threatens lawsuit, orders AG review
What happened
The Federal Reserve's Office of Inspector General released a 120-page report on Wednesday after a yearlong investigation into the roughly $2.4 billion Fed headquarters renovation, concluding it found no reasonable grounds to believe then-Chair Jerome Powell violated federal criminal law and no administrative misconduct — though it sharply criticized the board's management of costs that nearly doubled from initial 2020 estimates. Undeterred, President Trump posted on Truth Social that Powell, who remains on the Fed Board of Governors, 'should be forced to resign immediately,' said he had asked Attorney General Todd Blanche to review the report and 'determine what to do,' and warned that if Powell does not resign, 'he should be sued, at the highest level, by the United States Government, for either corruption or incompetence.'
Why it matters & what’s next are part of Pro, along with the audio summary.
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Who’s affected
- U.S. Treasuries / bond funds — any perceived erosion of Fed independence can reprice term premia and long-end yields
- Banks and financials (XLF) — directly exposed to the rate path and yield-curve shape
- Rate-sensitive sectors: utilities, REITs, homebuilders — hit by higher borrowing costs if hikes resume
- U.S. dollar and gold — dollar could soften on central-bank independence concerns; gold as safe-haven bid
- Broad U.S. equities — via the Fed policy-path repricing channel