The Lessons from Jerome Powell’s Defiance of Donald Trump

On Tuesday morning, the seven Washington-based governors of the Federal Reserve and the twelve presidents of the system’s regional reserve banks will gather at the Fed’s headquarters in Foggy Bottom to discuss the economy and what to do about interest rates. Since Congress created the central bank, in 1913, these policy meetings have been held in times of war, sky-high inflation, and raging pandemics, but never in circumstances like these. The meeting is scheduled to be the last presided over by Jerome Powell, whose term as Fed chair expires next month. But when the nomination of the Republican banker Kevin Warsh, Donald Trump’s pick to replace Powell, stalled in the Senate over a deeply dubious Justice Department investigation into Powell’s handling of cost overruns on a Fed renovation project, Powell vowed to stay on until the succession issue was resolved. A few days ago, it seemed perfectly possible that he would still be there in June for the next policy meeting. It was an unprecedented standoff.Last Friday, Trump backed down. His longtime friend and ally Jeanine Pirro, a former Fox News commentator who now serves as the U.S. Attorney for Washington, D.C., announced that her office was closing its investigation