Fed Chair Powell criticizes the US Justice Department’s “unprecedented” investigation.
He stated on Sunday that federal prosecutors have initiated a criminal investigation into Federal Reserve Chair Jerome Powell.
Powell made the highly unusual disclosure that the US Department of Justice (DoJ) had served the agency with subpoenas and threatened to indict the agency for his testimony to a Senate committee about building renovations at the Federal Reserve.
Powell stated that he believed the Fed’s refusal to cut interest rates despite repeated public pressure from the president prompted the investigation, which he dubbed “unprecedented.” Trump stated that he was unaware of the investigation. The DoJ has been contacted for comment.
The feud between Trump and Powell, which has been going on for a long time, has largely been one side, with the US president referring to the banker as “Mr. Too Late” and a “numbskull.” In response to Trump’s warning that the independence of the US central bank is in jeopardy, Powell issued a statement on Sunday for the first time.
Powell stated, “This is about whether the Fed will be able to continue setting interest rates based on evidence and economic conditions, or whether monetary policy will instead be directed by political pressure or intimidation.” “I have a great deal of respect for our democracy’s rule of law and accountability.”
“This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” he continued, “and the chair of the Federal Reserve is certainly not above the law.”
In an interview with NBC News on Sunday, Trump stated that he was unaware of the Fed investigation being conducted by the Department of Justice. He remarked about Powell, “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.”
“Extremely tense”
Yellen stated to CNBC, “Knowing Powell as well as I do, the odds that he would have lied are zero.” According to Yellen, “I do believe they’re going after him because they want his seat and want him gone.”
“It is the road to a banana republic when a president says the Fed should cut rates to lower payments on the federal debt.” She went on to say that the investigation “shows the lengths the President is willing to go to get his way.”
Since their construction in the 1930s, the Eccles and 1951 Constitution Avenue buildings have not been renovated by the Fed. Asbestos and lead contamination removal are among the health and safety tasks included in the “overhaul and modernization” of the buildings. The Fed claims that the renovations will eventually result in a cost reduction.
However, Trump has criticized the project’s rising costs, claiming that it will cost $3.1 billion (£2.3 billion), significantly more than the Fed’s estimate of $2.5 billion.
Powell is the latest person to clash with Trump before the US Department of Justice launches a criminal investigation. Powell was nominated by Trump for the Fed chair position in 2017 during his first term as president.
Trump is expected to name a successor to Powell as chair by the end of the month, and Powell is scheduled to step down in May.