I'll put up the tweet here from Jeanine Pierre, the post on x, I should say,

indicating that she's dropping this, sending it over to the Fed's IG. Help me understand something

because back in July, we had the Fed chair do essentially the same thing. There had

been there has been an IG investigation underway already. What's changed as a result of this?

I mean, it's an off ramp. It it was always going to reach a point to

this investigation whereby the president had to make a call, either carry on with the investigation

or drop it in order to get his pick for the Fed chair confirmed, which is,

of course, Kevin Walsh. And we're at that crunch point now. Mister Walsh has had his

hearing in the senate. He clearly has support with the exception of Tom Tillis who's holding

out because of the investigation. Obviously, the offer here is drop the investigation. You get your

candidate confirmed, you move on with your agenda for the Fed. Now we're not quite there

yet. Sounds so easy. It sounds so easy. It's it's element of the shock, but no

surprise here type thing. But we don't yet know, of course, how senator Tillis will respond

to this. Is it gonna be enough for him or not?

Who do you think got through to the president? Because we've been covering this for a

while, and even Republicans are big supporters. If you mentioned had gently said, like, we would

prefer he moved on with this, and he didn't seem to want to. What changed?

Didn't seem to want to at all. There was escalation of the recent weeks commentary from

him, commentary from miss Pellegrini, all making the point that they were going hard against mister

Powell. I think it comes back to the idea that hold on a second. We have

your candidate to run the Fed, the person you want. We've now had the hearing. We

clearly have support from among Republican GOP makers. Chairman Powell's term ends in a couple of

weeks May. We need to get on with this. And I think the thinking is that

idea just kind of permeated through eventually to the president that now we're at a juncture

where they have to get it done. There's one other point to consider, by the way.

If they had not gone ahead or if they do not go ahead and confirm mister

Walsh, it would leave the the prospect of mister Powell remaining on as a temporary chair.

Right.

And that's probably surely not what the White House would want. So I think the confidence

of all these issues just got them to push it over the line.

Wanna get into that more in just a minute here.

But let bring in the conversation, Chris, and just ask you to to react to what

Anna just said there, the fact that we'd heard a bit of bombast from the US

attorney for DC earlier in the week that she was gonna stick with this. What what

is your sense of what's changed here, the degree to which, the White House, perhaps with

some aid from, I don't know, the the chair of the banking committee from senator Tillis

made this happen.

Well, everything about this investigation has been abnormal. I mean, Spiro launched this investigation without talking

to DOJ leadership.

Are on mute this morning. It's early. It's early. Have we put our Zoom? Oh, our

our control room can hear you, so hang on. We're gonna try to work it out.

We'll go back to end of I mean, same question. Right? It's it's kinda exactly the

same question. But as we go forward, there's also no guarantee for Powell if he steps

away, this all happens, if war is just confirmed, the DOJ couldn't restart this investigation. Right?

That's right. Remember, there are several threads in this. So miss Perez's plan said we're gonna

drop the DOJ investigation. Wow. That sounds like a big deal on paper, but she also

made it clear that she reserves the right to reopen it. And we know that the

inspector general investigation will be very detailed. And, of course, we the DOJ could season something

on that on paper and perhaps reopen it. So it doesn't give mister Powell much finality,

and that's what he's been looking for.

Right. Chris, once more into the Zoom brief. Let's try again here. Have you have you

responded what I asked you the

last in you.

Which is which is what changed on the part of Janine Pero, the US attorney for

DC over the last few days?

Well, everything about this investigation has been abnormal. Pero started this investigation without talking to anybody

at DOJ. She coordinated with Bill Pelletche, the head of the federal housing agency, in order

to launch it. And then she was sticking to her guns in in the face of

of all this opposition. And even as soon as early as four days ago, she was

saying that she was committed to the investigation. And then, obviously, yesterday, she dropped the invest

just investigation. And if you look at even, you know, the language she used, she is

not willingly doing this. She was clearly leaned on in order to do it. She said

that there has been a referral over to the Fed, IG, in order to do the

investigation, but she reserves the right to resume the investigation. And it remains to be seen

if that's gonna satisfy, Republican senators like Tom Tillis when she's out there saying that she

might resume the investigation.

And that we haven't heard from senator Tillis. He's gonna do an interview tomorrow morning on

on NBC News. We haven't heard from Jerome Powell either. So let me play a bit

of tape here of the Fed chair talking a

bit about this investigation from from last month. Let's take a listen. I have no intention

of leaving the board until the investigation is well and truly over with transparency and finality,

and I would refer you to the statement that was in the Fed's brief that you

all have seen, and won't have anything more for you on that. On the question of

whether I will then continue to serve as a governor after my term ends and after

the investigation is over, I have not made that decision yet. And I will make that

decision based on what I think is best for the institution and for the people we

serve.

I linger on one phrase there, and that is, his desire not to leave until the

investigation is well and truly over. So here you have the DOJ effectively ending its investigation

for now. I guess we can add that caveat to to the end of that. But

the investigation does continue at the behest of the US attorney. This now moves over to

the the IG's office. Will it be enough to satisfy Jay Powell? Does does he feel

like that investigation is well and truly over?

Well, it's going to be a big judgment call because we know the IG inspector general

inquiry will be very detailed. I mean, recently, for example, they put out a report on,

overspend on laptops at Federal Reserve that was detailed with prices, with photographs, you name it.

So I'd imagine their investigation into a multibillion dollar renovation is probably going to turn up

issues. And the question then becomes, could any of that be used by the DOJ to

resurrect the investigation? That's going to be the, big call for chair Powell. And just to

be clear, it's unusual for him is what his term as chair ends in mid May.

He's allowed to stay as a governor. Till '28. Until the start of 2028, and that's

what's kind of unusual in all of this. Chris,

I mean, in that vein, Bloomberg opinion columnist Jonathan Living wrote that Powell should take the

win and leave when his term expires. Is there any leverage, any way to get any

kind of an immunity deal out of DOJ? I haven't heard any talk about that. I'm

assuming that's not on the cards. But what do you think? Should should Powell just go

gently into that good night, or should he get some guarantees before he gives away his

leverage?

Well, I think for Powell, this is a matter of, you know, fundamental principle. And, you

know, he feels like that, you know, he's got the upper hand here. And, also, I

I think it's really telling that the investigation was dismissed when Spiro was saying that she

had legitimate reasons to look into the cost overruns. And, usually, the justice department isn't going

to back down from a criminal investigation when they feel that they have the goods in

order to continue. And so the fact that the department decided to back away from the

investigation tells you that there was, you know, some failures on the depart on the department's

fault part to to do to, you know, have the information that would actually result in,

you know, a fruitful investigation. And so everybody was looking for an off ramp. And, you

know, at this point, it looks like that, you know, the justice department is providing the

off ramp for Powell, and the question is, will he take it?

Chris, we're lucky to have you with us for your perspective on on this office, on

the US attorney's office for for DC. So I think of the the major US attorneys

now. I think there are a lot of people who know of Jay Clayton. Obviously, he

had a big government profile before he took that job in in New York in the

Southern District. But I think it's safe to say Janine Pirro, formerly judge Janine, is best

known to to the American people. What do we know of how she's running this office,

the role that it's playing in the broader justice department ecosystem at a time when there

is an acting attorney general? We'll see what happens to to Todd Blanche. The the role

that she has now, talk a bit about that, and and the platform that she has

as The US Attorney for for DCM.

Well, I think that Spiro has emerged as one of the most aggressive and effective, surrogates

for for Trump in terms of carrying out his agenda. If you look at the cases

that she's been pursuing, she's been very aggressive in terms of pursuing cases that relate to,

like, immigration crackdowns and, like, and, like, and, like, violent crime crackdowns, but also going after

Trump's perceived political enemies. I mean, she was the one that brought the investigation against the

Democratic lawmakers who put out the video talking about how military members, you know, have an

obligation to to, you know, follow their follow their oath. And that investigation failed in when

she tried to go before a grand jury. So she's had a number of, you know,

cases that have been clearly driven by the the interest of of of the president, but

she has not been able to succeed in in finishing those investigations. And she's had some

some really, you know, significant public failures, with some of the, efforts that she's made to

go into the grand jury and and and and get charges.

I've been speaking to some just friends and acquaintances in DC who are lower level, prosecutors

at DOJ who just also just talk about the whiplash of not knowing what they're supposed

to be working on, if what they work on is then gonna get pardoned by the

president, who they're supposed to be investigation, and just those shifting sands underneath them. I do

wanna ask you, though, as we look back on Jay Powell's term at the Fed, what

are the big takeaways? What did they do right? What did they do wrong? What did

they change, and what is his legacy gonna be?

Well, you know, it was a very turbulent time when if if you think about it,

he had the pandemic. Yeah. Then he had, the great inflation outbreak. And then, of course,

he had this political attack by the Trump White House. Think the Fed publicly, mister Powell

publicly would publicly would say that they responded as they needed to during the pandemic, a

time of grave economic threat, rolling out all of the support that they did for households

and businesses, cutting down interest rates and putting money into the money markets, trying to keep

things ticking over so they would stand by that. Of course, the criticism has been that

they were very slow to respond to inflation. Yeah. I remember at the time they were

calling it transitory. And, of course, that left a legacy now of price burn in people's

pockets for years since. So the inflation story is there. And then when it comes to

the battle against Trump for protecting Fed independence, I think on that one, he's come across

as being seen as firm and resolute and trying to stand up for the institution against

political pressure. So like anyone, it's clearly a mixed legacy. He has some supporters and some

fans.