How the White House didn’t see this coming is mind-boggling. For some reason, the administration thought it could get away with trying to bring criminal charges against the sitting Chairman of the Federal Reserve, Jerome Powell.
Powell is a conservative Republican with a lot of power, especially in the markets. The administration did not seem to understand that messing with Powell through a fake investigation would lead to instability and market disruption.
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What the administration really didn’t anticipate was the backlash from congressional Republicans. The reaction was so violent that the White House panicked.
Politico reported:
The Justice Department’s criminal investigation into whether Fed Chairman Jerome Powell misled Congress about renovations to Fed headquarters — and allegations about who leaked the news — has the White House in damage control mode. Officials are working to reassure markets and distance themselves from an episode that aides say was never supposed to happen, according to five people familiar with the administration’s response who were granted anonymity to discuss it.
…
Privately, some White House officials view the episode as radioactive, with aides and allies eager to distance themselves from an investigation that they say could do more damage to the White House than to Powell. One of the five people familiar said some in and near the White House were “panicked” that a new threat to the Fed chief’s job security could spook the bond market.