If President Donald Trump thinks piling pressure on the Federal Reserve will further his goal of lowering interest rates and stimulating economic growth, he should think again. On the contrary, it’s likely to have the opposite effect.

It’s hard to see the Justice Department’s criminal investigation of Fed Chair Jerome Powell, purportedly for statements surrounding the renovation of the central bank’s headquarters, as anything other than the latest iteration of Trump’s campaign to subjugate the Fed. As such, it’s a huge mistake — one that further cedes the high ground to Powell.

Let me count the ways in which the move will undercut Trump’s own aims.

First, it’ll now be much more difficult for Powell to back further rate cuts. If he did, investors would worry that the Fed’s independence had already been compromised. Is Powell cutting rates because that’s what the economy needs, or because he’s appeasing Trump?

Second, it motivates Powell to stay on as a Fed governor once his term as chair ends in May. In a video released Sunday, Powell indicated that he wouldn’t be pushed into “following the preferences of the president.” If he sticks around, the Trump administration will lose an opportunity to put another loyalist on the Board of Governors and the policy-making Federal Open Market Committee. That will make it more difficult for Powell’s successor as chair to push through further rate cuts.

Third, it complicates the process of confirming Powell’s successor. As Republican Sen. Thom Tillis put it: “I will oppose the confirmation of any nominee for the Fed — including the upcoming Fed chair vacancy — until this legal matter is fully resolved.” The Senate Banking Committee, which must confirm the new prospective chair, has a two-vote Republican majority. If Tillis were to side with a united Democratic minority, the result would be a 12-12 stalemate.

Fourth, the attack on Powell’s integrity will make it more difficult for the incoming chair to win the hearts and minds of the Fed’s monetary policymakers and staff. Even if the new chair wants to lower rates, concerns about how this might affect perceptions of the Fed’s independence will increase other FOMC members’ resistance.

The Justice Department investigation also raises the stakes in the case of Fed Governor Lisa Cook, whom the Trump administration has sought to fire for allegedly providing false information on one or more mortgage applications. If the Supreme Court, which is supposed to take up the case this month, rules that Cook can be dismissed “for cause,” the precedent will make Powell’s position more vulnerable. Conversely, if the Supreme Court rules in Cook’s favor or sends the case back to the lower courts to adjudicate the facts, Powell will be less vulnerable and more likely to stay on as a governor.

The Trump administration appears to have badly miscalculated. Powell’s term as chair will end long before the investigation is concluded, a prosecution decision is made and the case is litigated. Did anyone think that Powell would go quietly? If so, they don’t understand the man, his integrity and his commitment to the Fed’s independence.

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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Bill Dudley is a Bloomberg Opinion columnist. A former president of the Federal Reserve Bank of New York, he is a nonexecutive director at Swiss Bank UBS and a member of Coinbase Global's advisory council.

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