Federal Reserve chair Jerome Powell has blasted the Trump administration over a new criminal probe, arguing it’s the latest attempt to destroy the central bank’s independence on interest rates.
Powell said on Sunday that the charges are “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
The US attorney for Washington, DC, opened a criminal investigation into Powell on Friday over the agency’s renovation of its headquarters and whether Powell lied to Congress about the size of the project, The New York Times reported on Sunday.
President Donald Trump has repeatedly attacked Powell and the Fed for refusing to grant his demands to cut interest rates.
Trump has long threatened legal action over renovations to the Fed building and has said he will fire Powell. He tried to fire Fed governor Lisa Cook over accusations of mortgage fraud, but the Supreme Court later blocked the move.
“I have deep respect for the rule of law and for accountability in our democracy. No one — certainly not the chair of the Federal Reserve — is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Powell, whose term as Fed chair ends in May, said the criminal probe “is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”
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Trump has lined up a series of loyalists to potentially replace Powell, many of whom have said they’d cut rates.
Kevin Hassett, a key economic adviser to Trump, is widely considered to be the frontrunner to replace Powell and has said Trump’s views on interest rates will hold “no weight” on agency decisions.
The Trump administration has already scored a win with the Fed, having installed Stephen Miran, a close Trump ally and economic adviser, to the board of governors last year. Miran voted to drop interest rates by 0.5% at his first Fed meeting in December.
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Source: https://cointelegraph.com/news/fed-powell-says-doj-probe-due-defying-trump-interest-rates?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
