A criminal investigation has been launched against Fed Chairman Powell. What the media is writing

The US Department of Justice has launched a criminal investigation into Federal Reserve Chairman Jerome Powell. The head of the regulator, who will leave his post in May, is suspected of embezzlement during the renovation of the central bank's headquarters. Investors reacted negatively to the incident, seeing pressure from the White House. What the world's media write about the Powell case is in the Izvestia digest.

Axios: The Ministry of Justice has launched a criminal investigation into Powell

US federal prosecutors are investigating Fed Chairman Powell's activities in connection with a multibillion-dollar renovation project at the headquarters of the US central bank. This is an unprecedented escalation of US President Donald Trump's campaign against Powell, whom the head of state criticized for his high interest rate policy. Powell's term as Fed chairman expires in about four months.

In an unusually blunt statement, Powell said the investigation was an excuse to put pressure on the Fed over interest rate policy. Trump said he "knew nothing" about the Justice Department investigation. The investigation threatens to affect the approval process for the future chairman of the Federal Reserve, which Trump should propose, as well as other candidates for senior positions in central banks.

Reuters: Blow to Powell shocks markets

The bidding began on January 12 with the sensational announcement by the Trump administration that it was threatening to indict Powell for his testimony to Congress last summer regarding the reconstruction project of the Federal Reserve building. Powell argues that this is an "excuse" to gain more influence over the central bank and monetary policy. The immediate reaction of the market was to sell the dollar and lower stock futures prices. Gold prices exceeded the $4,600 per ounce mark for the first time.

Perhaps now the markets generally expect the Fed to make concessions to Trump and cut rates freely after the new Fed chairman settles in after May, when Powell's term ends. Futures prices still show that two rate cuts are planned for the year.

The effect is no longer the same: how the US Federal Reserve rate will affect the Russian economy

Raw materials should rise in price, which will favorably affect the inflow of foreign currency and the plans of the Russian Central Bank to lower the rate.

Bloomberg: Bill Pulte became the main initiator of Powell's subpoena.

According to sources familiar with the situation, Bill Pulte, director of the Federal Housing Finance Agency (FHFA), was one of the main driving forces behind the Trump administration's decision to subpoena Powell. Some of Trump's allies were alarmed by this move, fearing that litigation against the Fed chairman would destabilize the bond market. They are also concerned that this will force Powell to change his mind about leaving the Fed after the end of his presidency in May. Powell may remain a member of the Fed's board of governors until 2028 and has not yet stated whether he intends to leave, as is customary.

The investigation is being conducted by the District of Columbia Prosecutor's Office. According to sources, some senior Trump aides were unaware of the subpoena until Powell was served with it on Friday evening. They analyze the consequences of Powell's prosecution, including Wall Street's reaction to the fact that bond markets are likely to perceive what is happening as a threat to the Fed's independence.

Politico: US lawmakers react negatively to Powell's prosecution

Republican Senator Thom Tillis, a member of the Senate Banking Committee, quickly opposed the Justice Department's decision to investigate Powell criminally. He stated that he would oppose the approval of any candidate for the post of head of the Federal Reserve until this legal issue is fully resolved. A significant portion of Republicans in the House of Representatives loyal to the MAGA movement were also surprised.

Concerns among investors and businesses that the Fed will make decisions based on the president's wishes rather than the long-term interests of the economy could undermine confidence in the central bank as a tool to combat inflation and lead to higher interest rates in the long term. Powell was first nominated to the board of governors of the central bank under President Barack Obama, then became chairman under Trump during his first term, after which he was re-nominated by President Joe Biden.

CNN: The pressure campaign on Powell has been going on for a year now

Trump and his allies have repeatedly criticized Powell over the past year for not cutting interest rates in accordance with the president's wishes. The Fed cut rates three times in a row in the second half of last year, although representatives of the department recently stated that they were unlikely to do so again in the near future. Trump's pressure campaign included a barrage of personal insults against Powell, which escalated into threats of dismissal. However, Powell insists that Trump does not have the authority to fire him.

The conflict spilled out into the public in July, when Trump toured the headquarters with Powell. Powell corrected Trump in front of reporters about the cost of the project, and the tension between the two politicians was palpable. The federal investigation comes as Trump prepares to announce his choice of Powell's successor after his term ends in May. This decision will complete the months-long process of searching for a candidate for perhaps the most influential position in the global economy.