The only surprising thing about President Trump directing federal investigators to prepare possible criminal prosecution charges against highly respected Federal Reserve Chairman Jay Powell — a Trump appointee himself — is that anyone is surprised by this news.
Financial markets initially fell before recovering as investors dismissed the Trump administration’s Justice Department action as the desperate posturing of a lame duck, and a rift emerged in the GOP over open concerns about the sacred independence of both the DOJ and the Federal Reserve.
For example, prominent Republican Sen. , of the Senate Banking Committee, stated that “It is now the independence and credibility of the Department of Justice that are in question.”
Similarly, Republican Rep. , chairman of the House Financial Services Committee, described this investigation as “an unnecessary distraction that could undermine this administration and sound monetary decisions.”
Even Trump’s own Treasury Secretary, , pushed back against Trump over his “revenge probe” of Powell.
The series of dramatic, successive prosecutions against such as Trump’s former National Security Advisor John Bolton, former FBI Directors James Comey and Christopher Wray, New York Attorney General Letitia James, former CIA Director John Brennan, Federal Reserve Governor Lisa Cook, former Homeland Security official Miles Taylor, Sen. Adam Schiff, Cybersecurity Chief Christopher Krebs, and former Special Counsel Jack Smith, among others, are alarming. As Trump’s messaging indicates, he has personally ordered these prosecutions, revealing a weaponization of the judiciary against perceived political foes. Some critics liken this to the impulsive emotional outbursts of the crazed Queen of Hearts from Alice in Wonderland, who screams “off with their heads” at anyone who displeases her. However, what’s overlooked is that these actions are far more deliberate, part of a broader tactical strategy.
The charges against Powell — that he lied to Congress over building renovation cost overruns — are ludicrous, and such charges will almost certainly be dismissed in court. The alleged 40% cost may be true, but they are not criminal — much less reckless. The actual Fed renovations are costing $2.5 billion, which is 40% over budget due to inflation, yet Trump admitted last month that his own East Wing demolition and construction of a new White House ballroom has swollen to over budget. This is truly remarkable, as the project was only announced six months ago and Trump, as a builder, should know how to accurately estimate construction costs.
These costs are not excessive, considering this is the first comprehensive renovation in 90 years since the Marriner Eccles Building was constructed in 1937. By contrast, the nearby Hart, Russell, and Dirksen Senate Office Buildings and the Cannon House Office Building have undergone ongoing massive renovations over the decades.
Additionally, regardless of these common cost overruns, none of this comes from U.S. taxpayer funds. The Fed is funding the renovations from its own budget, as it is entirely self-sufficient in operations, supported primarily by investment income from the U.S. Treasury bonds it holds.
Trump’s attempt to ambush Powell on national TV this summer during a tour of the construction site backfired, with Powell and embarrassing him. Trump’s inaccurate claim that the renovations had swollen to $3.1 billion was revealed to mistakenly include a separate, already-completed renovation of a different building.
On the surface, Trump is angry that the Federal Reserve is not cutting interest rates more quickly and deeply, and that is why Powell says he is being targeted, as the chairman stated: “This new threat is not about my testimony last June or the renovation of Federal Reserve buildings. … Those are pretexts. The threat of criminal charges stems from the Federal Reserve setting interest rates based on our best judgment of what serves the public, rather than adhering to the President’s preferences.”
Seventy-one percent of the 200 CEOs at my recent Yale CEO Summit said that Trump had already eroded the Federal Reserve’s independence through his administration’s actions, and 81% stated they prefer Governor Chris Waller as Powell’s potential successor when the chairman’s term ends this spring, assuming Waller will strengthen Fed independence.
So, if this legal attack is not an impulsive outburst, what is the strategic reasoning? Like Trump’s inaccurate claim this month that the Venezuela operation was driven by U.S. oil producers’ interests — a claim they flatly rejected, calling Venezuela “uninvestable” — this is more of Trump’s diversionary tactics. In my new book, Trump’s Ten Commandments (Simon & Schuster), I call this his “Wall of Sound” tactic: changing the public narrative from his slumping poll numbers, including a year-end national survey showing only 36% approval and 57% disapproval. Even over half of MAGA/Trump voters disagree with Trump on his handling of the Epstein files, affordability, and healthcare. His ICE/immigration policies have dropped 30% in recent polls.
But Trump has accomplished his goal of making every media outlet stop their nonstop focus on his key domestic policy weaknesses. Additionally, he is using three other tactics in this Fed/Powell diversionary effort — employing his “hub and spoke” leadership model (in which no agencies operate independently), targeting adversaries with selective retaliation, and skillfully using the classic mass communication propaganda technique known as the “sleeper effect,” where a false message is repeated relentlessly until it eventually gains credibility.
These are four of the 10 tactics in Trump’s playbook that I call his “Ten Commandments.” He chooses them intentionally, not impulsively, despite his bluster. Trump is not tone-deaf or stupid. He is cunning like a fox — but even foxes, typically symbols of intelligence and cunning, fall prey to their own overconfidence in their cleverness.