The Indicator from Planet Money One Fed battle after another
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Jan 13, 2026 Federal Reserve Chair Jerome Powell is facing grand jury subpoenas, calling them a sham while highlighting severe stakes like potential criminal charges. The hosts dive into the Fed's dual mandate on policy, interest rates, and how they impact inflation. Trump’s grievances over interest rates add another layer of political tension. Discussion explores cost overruns in Fed building renovations, raising questions about legality. This all ties into a broader narrative of political pressure that threatens central bank independence.
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Powell's Unusually Direct Message
- Jerome Powell publicly framed DOJ subpoenas as an attack on Fed independence rather than a narrow renovation probe.
- The video was unusually direct for a Fed chair and highlighted escalating political pressure.
Rates Drive The Political Clash
- The Fed's dual mandate is to pursue full employment and 2% inflation, mainly via interest rates.
- High rates are politically painful and drive the core conflict between the Fed and President Trump.
Old Fed Buildings Spark Cost Spike
- The Fed approved renovating two 1930s buildings on the National Mall in 2017 and discovered asbestos and other problems.
- Initial estimates rose from $1.9 billion in 2021 to about $2.5 billion due to inflation and added discoveries.