Why Trump’s backers on Wall Street are desperate for the DOJ to end its Powell probe

MAGA’s Wall Street contingent is praying that President Trump will put an end to his DOJ’s investigation of Fed chair Jerome Powell – and they have been privately pleading their case to the White House, On the Money has learned. 

The big issue is that the US still sells a lot of debt. Among the concerns Trump’s backers on Wall Street are expressing to White House officials, I am told, is that the US runs a $2 trillion deficit and needs buyers – particularly foreign buyers – to keep the government functioning. 

If these buyers think the Fed is run not by Powell but instead by Trump and his political whims, they might boycott our bond auctions as they did, albeit briefly, when Trump jumped the shark last year with his onerous “Liberation Day” tariffs. 

What has MAGA Wall Street freaked out is the unintended consequence of going beyond attacking Fed Chair Jerome Powell every day over his lousy job performance and instigating a perjury investigation.  Jack Forbes / NY Post Design

For what it’s worth, Wall Streeters say their pleas seem to be falling on sympathetic ears. The problem: The message doesn’t seem to be getting through.

“The feeling among most of the senior staff in the White House is that the president is screwing things up with this investigation of Powell, though no one will publicly admit it,” said one Wall Street executive who has spoken to Trump’s people. “It’s also unclear if they have made that case to Trump himself.”

Trump’s Wall Street supporters are hardly Powell fans. Like the president, they think he’s a lousy Fed chair who kept printing money during the Biden years stoking inflation that hit as high as 9%. What has MAGA Wall Street freaked out is the unintended consequence of going beyond attacking Powell every day over his lousy job performance and instigating a perjury investigation into the Fed chair. 

The latter seems like a stretch — whatever Powell told Congress about his splurge on a new Fed headquarters. Many fret that the probe also might even make it more difficult for Trump to get rid of the central banker even after his term ends because he can stay as a fed governor and continue to make Trump’s life miserable.

President Trump and Powell during a tour of Fed headquarters in July. REUTERS

“This thing is next level dumb and I’m largely a fan of the president,” said another Trump supporter on Wall Street. “It actually makes it harder now for the Fed to cut rates because they will look like they were intimidated which will make it harder to sell our debt.”

A White House spokesman told On The Money the notion that most Trump officials are against the Powell investigation is “fake news.”

To be sure, there are plenty of questions whether the lobbying effort is having any impact. Yes — Trump said for the umpteenth time this week that he has no plans to fire Powell. But that was a day after he ripped Jamie Dimon for warning against it, flatly saying he was “wrong” and speculating whether the bank boss would make more money with rates staying high.

Wall Streeters admit that Powell overspent on the Fed’s “Taj Mahal” headquarters, as Trump called it this week. But they counter that he wouldn’t be the first government bureaucrat to do so and his testimony to Congress on its price tag was far from a lie. He is also paying for the remodeling not with money from the Treasury, but out of the Fed’s coffers.

Powell, meanwhile, has denied the charges and appears to be digging in his heels. Powell is worried about persistently high inflation, still hovering at 2.7%, though hardly at Biden levels. Trump’s attacks on Powell are over his slow response to cutting interest rates, thus making homeownership less affordable, which is why he wants him out like yesterday. 

Over the weekend, Powell gave rare public comments that Trump is looking to destroy the very thing that makes the US currency “King Dollar,” and why people buy our debt: Fed Independence. Powell is more than hinting that he might be the guy to make sure there is a counterweight to Trump and stick around as a governor, fight the perjury charges head on, and become a martyr for central bank sovereignty. 

Now that would be interesting.