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The Justice Department's criminal investigation of Federal Reserve Chair Jerome Powell represents one of the most extraordinary attacks on central bank independence in American history. Ostensibly about a $2.5 billion headquarters renovation gone $700 million over budget, Powell says the probe is really about pressure to lower interest rates and President Donald Trump's desire for a more compliant Fed.
Speaking in Detroit on Tuesday, Trump downgraded Powell from a "real stiff," as he dubbed him in October, to "that jerk" for not lowering interest rates to his preferred levels. He also repeated that Powell "will be gone soon," which is true no matter what happens in the criminal probe: Powell’s second four-year term as Fed chair is up in May, although his seat on the Board of Governors runs through 2028.
Nevertheless, Trump’s aggressive moves have shaken up DC. US Attorney Jeanine Pirro subpoenaed the Fed without notifying the Treasury, the White House, or her DOJ superiors, triggering bipartisan congressional backlash and market volatility that exposed the political risks of weaponizing prosecutorial power against institutional independence.
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Jerome Powell ⬆
The usually buttoned-up central banker dropped a Sunday night video accusing the president of weaponizing criminal prosecution to intimidate the Fed into cutting rates. His blunt defiance—"I will continue to do the job the Senate confirmed me to do"—earned bipartisan praise even from Republicans who normally dismiss him. America loves a nerdy bureaucrat with a spine.
Bill Pulte ⬇
The Housing regulator who's been trying to turn the mortgage records of Trump’s political opponents into criminal charges brought a Powell "wanted poster" to Mar-a-Lago, championed the investigation, flew on Air Force One the day subpoenas were served, then claimed on TV, "I don’t know anything about it." When your scalp-hunting includes props, you forfeit plausible deniability.
Lisa Cook ⬅➡
The Supreme Court hears arguments on January 21 on whether Trump can fire the Federal Reserve Governor over Pulte’s dubious mortgage fraud allegations. The Court signaled they may be leaning her way when they ruled in October to let her remain in her role while she appeals. Now the result of her case could determine Powell’s fate as well.
Thom Tillis ⬆
The retiring Republican Senator from North Carolina who sits on the Banking Committee pledged to block all Fed nominees until the investigation is resolved. Some lame ducks can bite.
Scott Bessent ⬇
The Treasury Secretary tried months ago to kill Pulte's anti-Powell crusade, thought he'd succeeded, learned Friday he had been blindsided by subpoenas. Called Trump to complain it "made a mess" of markets. Being the adult in the room doesn’t matter if the children are running the place.
Jeanine Pirro ⬇
When the former Fox News host gave up her comfy TV gig to become US Attorney she said it was to go "back to my roots" of wanting to go to law school to "bring justice to victims of violent crimes: women, children and the elderly." Instead, she's subpoenaing the Fed chair over a building renovation. Perhaps the path to prosecutorial nobility is paved by Trump’s passion for payback, but probably not.
Originally a staple of Newsweek's print edition, Conventional Wisdom used arrows to track whose stock was rising or falling in the political circus. We're reviving it in the digital age because the problem it lampooned—hyperbole and partisan certainty masquerading as insight—has only intensified.
CW assigns arrows—up, down, or sideways—to the figures and forces shaping current events. The arrows don't predict the future or claim special insight. They capture the prevailing winds of the moment, uncluttered by tribal howling. In an era when partisan media reinforces rather than questions assumptions, CW operates from the center—skeptical of left and right alike, committed to puncturing inflated reputations and recognizing overlooked truths.
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