Fed Chair Powell Under Criminal Investigation, Threatens Fed's Independence

Fed Chair Powell Under Criminal Investigation, Threatens Fed's Independence

The U.S. Federal Reserve is facing an unprecedented threat to its independence after the Justice Department served the Fed with grand jury subpoenas on Friday, according to Fed Chair Jerome Powell. The investigation, led by the Trump administration, is focused on cost overruns for the renovation of the Fed's headquarters building.

Powell stated that the investigation is a threat to the Fed's independence, which is a cornerstone of the U.S. financial system. The Fed's independence allows it to make monetary policy decisions without political interference, ensuring that the economy is stable and growing.

The investigation is a result of the Trump administration's criticism of the Fed's monetary policy decisions, particularly the decision to raise interest rates. The administration has been pushing for the Fed to cut interest rates, which would benefit the economy in the short term but could lead to inflation and other economic problems in the long term.

Powell has been a vocal critic of the Trump administration's economic policies, and the investigation is seen as an attempt to intimidate him and the Fed into making decisions that benefit the administration's interests rather than the economy as a whole.

The investigation is also a threat to the Fed's reputation and credibility, which are essential for maintaining trust in the financial system. If the Fed is seen as being influenced by politics, it could lead to a loss of confidence in the economy and a decline in the value of the dollar.

The investigation is ongoing, and it is unclear what the outcome will be. However, it is clear that the Trump administration's actions are a threat to the Fed's independence and the stability of the U.S. financial system.

Sources

[2] Powell says criminal investigation by Trump’s Justice Department threatens Fed’s independence
[3] Fed Chair Powell says he's under criminal investigation, won't bow to Trump intimidation