Trump Seeks to Tame Fed's Independence Amid Ominous Investigation Threats
In a move widely condemned as an unprecedented attempt to undermine US central bank independence, Donald Trump's administration has launched a criminal investigation into Federal Reserve Chairman Jerome Powell. The Department of Justice served the Fed with grand jury subpoenas on Friday, threatening a potential indictment related to Powell's testimony before the Senate banking committee in June last year.
Former Federal Reserve chairs Alan Greenspan, Ben Bernanke, and Janet Yellen have united against this effort, warning that similar prosecutorial attacks in other countries have led to "highly negative consequences" for inflation rates. The trio stated that such actions have no place in the US, which prides itself on the rule of law.
Powell argues that he has been threatened with criminal charges due to the Fed's decision to set interest rates based on its best assessment of economic conditions, rather than following the president's preferences. This move marks a significant escalation in Trump's extraordinary attack on the Fed's independence, as he has repeatedly clashed with Powell and the central bank over rapid interest rate cuts.
Several Republicans have criticized the justice department's pursuit of Powell, including Senator Thom Tillis, who stated that he would oppose any nominee for the central bank until this legal matter is fully resolved. Economist warnings echo that Trump's attempts to influence the Fed risk plunging the US into a period of 1970s-style inflation and triggering a global backlash in financial markets.
Meanwhile, Wall Street remains calm, with stocks holding steady despite the tensions. The benchmark S&P 500 was flat at lunchtime, while the tech-focused Nasdaq Composite ticked up 0.3%. As Trump searches for his preferred successor to Powell's chairmanship, which is set to expire in May, the Fed's independence hangs precariously in the balance.
Critics of the investigation point out that it is an attempt by Trump to exert greater control over monetary policy and undermine the Fed's ability to set interest rates based on evidence and economic conditions. With Kevin Hassett, a senior White House official, seen as the favorite to succeed Powell, this development raises questions about the role of politics in monetary policymaking.
In a move widely condemned as an unprecedented attempt to undermine US central bank independence, Donald Trump's administration has launched a criminal investigation into Federal Reserve Chairman Jerome Powell. The Department of Justice served the Fed with grand jury subpoenas on Friday, threatening a potential indictment related to Powell's testimony before the Senate banking committee in June last year.
Former Federal Reserve chairs Alan Greenspan, Ben Bernanke, and Janet Yellen have united against this effort, warning that similar prosecutorial attacks in other countries have led to "highly negative consequences" for inflation rates. The trio stated that such actions have no place in the US, which prides itself on the rule of law.
Powell argues that he has been threatened with criminal charges due to the Fed's decision to set interest rates based on its best assessment of economic conditions, rather than following the president's preferences. This move marks a significant escalation in Trump's extraordinary attack on the Fed's independence, as he has repeatedly clashed with Powell and the central bank over rapid interest rate cuts.
Several Republicans have criticized the justice department's pursuit of Powell, including Senator Thom Tillis, who stated that he would oppose any nominee for the central bank until this legal matter is fully resolved. Economist warnings echo that Trump's attempts to influence the Fed risk plunging the US into a period of 1970s-style inflation and triggering a global backlash in financial markets.
Meanwhile, Wall Street remains calm, with stocks holding steady despite the tensions. The benchmark S&P 500 was flat at lunchtime, while the tech-focused Nasdaq Composite ticked up 0.3%. As Trump searches for his preferred successor to Powell's chairmanship, which is set to expire in May, the Fed's independence hangs precariously in the balance.
Critics of the investigation point out that it is an attempt by Trump to exert greater control over monetary policy and undermine the Fed's ability to set interest rates based on evidence and economic conditions. With Kevin Hassett, a senior White House official, seen as the favorite to succeed Powell, this development raises questions about the role of politics in monetary policymaking.
I mean, i get it he wants his way but this is like, super serious business & he cant just dictate to the fed 
. Plus, former fed heads are all against it & thats gotta count for something 
. If trump keeps at it tho, we might see 70s-style inflation & a global market crash 
. The Fed isn't supposed to be about politics, it's about keeping the economy stable 
. This whole thing is just gonna end in a mess and hurt the country 
. Can someone please tell me why this guy can't just leave the Fed alone? 
Trump thinks he can just bully Jerome Powell into doing what he wants? Newsflash Donald: the Fed isn't some puppet bank you can control with threats and subpoenas. They're supposed to make decisions based on economic facts, not your ego 
. If you want inflation rates that are "1970s-style", maybe you should try managing the economy instead of trying to micromanage every little detail 
. This Trump fella's got some serious nerve thinkin' he can just strong-arm Powell into doin' his biddin'. Newsflash, Donald: the Fed's got its own agenda and it ain't always gonna align with yours 
. I mean, I get it, we don't wanna see no inflation like the 70s, but this whole thing feels like some kinda political stunt to me 
.
. Meanwhile, the rest of us are over here wonderin' how things went so wrong 
.
. Stay tuned, folks! 
. This is just another case of him trying to play with fire 
and get burned. The US needs an independent central bank, not some politician's personal playground 
.
The fact that even former Fed chairs are speaking out against this move says a lot about how reckless it is. Let's hope some sanity prevails and the Fed's independence remains intact 
economist warnings about inflation are also pretty legit - we don't want to see a repeat of the 70s anytime soon 
. And can we talk about how this just exacerbates the whole "what happens when politics meets policy" situation? Like, I'm all for accountability but this feels super fishy 
. Anyway, gotta keep an eye on this one, it's gonna get interesting 
and the economy suffered 
and trust me i don't want that 
it's time we protect it