How the White House didn’t see this coming a mile away is mind-boggling. For some reason, the administration thought that they could get away with attempting to drum up criminal charges against the sitting Federal Reserve Chair Jerome Powell.
Powell is a conservative Republican with a lot of power, especially over the markets. The administration didn’t seem to understand that messing with Powell through a bogus investigation would cause market instability and disruptions.
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The thing that the administration really didn’t count on is the backlash from congressional Republicans. The backlash is so severe that the White House is freaking out.
Politico reported:
The Justice Department’s criminal investigation into whether Fed Chair Jerome Powell misled Congress about renovations at the Fed headquarters — and allegations over who leaked the news — has the White House in damage-control mode. Officials are scrambling to reassure markets and create distance from an episode that aides say was never meant to unfold, according to five people familiar with the administration’s reaction who were granted anonymity to discuss it.
…
Privately, some White House officials see the episode as radioactive, with aides and allies eager to distance themselves from a probe they believe could do more damage to the White House than to Powell. One of the five people familiar said some inside and close to the White House are “freaked out” that a further threat to the Fed chief’s job security could spook the bond market.