United States President Donald Trump\u2019s administration has opened a criminal investigation into Federal Reserve Chair Jerome Powell, a development set to heighten concerns about the independence of US monetary policy.<\/p>\n
Powell said on Sunday that the US Department of Justice had served the Fed with subpoenas over testimony he made before Congress related to the $2.5bn renovation of the central bank\u2019s headquarters in Washington, DC.<\/p>\n list of 4 items<\/span>end of list<\/span><\/section>\n Powell said concerns about the renovation project were \u201cpretexts\u201d to undermine the central bank\u2019s independence in setting interest rates.<\/p>\n \u201cThe threat of criminal charges is 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,\u201d Powell said in a rare video message.<\/p>\n \u201cThis is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions \u2013 or whether, instead, monetary policy will be directed by political pressure or intimidation.\u201d<\/p>\n Powell added that he had carried out his duties \u201cwithout political fear or favour\u201d and with the sole purpose of upholding the central bank\u2019s dual mandate of price stability and maximum employment.<\/p>\n \u201cPublic service sometimes requires standing firm in the face of threats,\u201d he said.<\/p>\n \u201cI will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.\u201d<\/p>\n Trump has repeatedly threatened to fire Powell over his refusal to cut interest rates faster, and is waging a legal battle to remove Lisa Cook, Powell\u2019s fellow board governor, after ordering her removal in August.<\/p>\n Trump and his allies have also lashed out at Powell over the cost and management of the Fed refurbishment project, which has run significantly over budget.<\/p>\n In July, Bill Pulte, a Trump appointee who leads the Federal Housing Finance Agency, called on Congress to investigate Powell over his alleged \u201cpolitical bias\u201d and \u201cdeceptive\u201d testimony about the renovations.<\/p>\n Trump\u2019s pressure campaign has raised fears about the continuing independence of the central bank, whose ability to set interest rates free from political considerations is considered crucial to maintaining confidence in the US economy.<\/p>\n US stock futures fell after Powell\u2019s announcement, with those tied to the benchmark S&P 500 dropping more than 0.4 percent in morning trading in Asia. The US dollar fell about 0.2 percent against major currencies.<\/p>\n In an interview with NBC News, Trump denied any knowledge of the investigation.<\/p>\n \u201cI don\u2019t know anything about it, but he\u2019s certainly not very good at the Fed, and he\u2019s not very good at building buildings,\u201d he said.<\/p>\n Under US law, the president may only fire the Fed chair \u201cfor cause\u201d, a provision widely interpreted to mean specific misconduct, not differences over policy.<\/p>\n \u201cMuch to the president\u2019s frustration, the legislative architects of the modern Fed turn out to have been good at their craft,\u201d David Wilcox, a senior fellow at the Peterson Institute for International Economics and the director of US economic research at Bloomberg Economics, told Al Jazeera.<\/p>\n \u201cThey meant to allow the Fed to set monetary policy one step removed from political control, and, so far, their safeguards have stood up under pressure. In response, the president has resorted to increasingly outlandish tactics. This one is the most extreme example yet.\u201d<\/p>\n Powell, who has served as Fed Chair since 2018, is due to step down from the top role in May, though his term on the seven-member board of governors does not expire until\u00a0January 2028.<\/p>\n Mark Spindel, chief investment officer at Potomac River Capital, said the Trump administration\u2019s latest move could encourage Powell to stay on the board longer than he would have otherwise.<\/p>\n \u201cI was sure he was going to leave in May when his chairmanship ends. Now, I\u2019m less sure,\u201d Spindel told Al Jazeera.<\/p>\n \u201cHe is an institutionalist, and will defend its independence as he sees it. I\u2019m asking myself, \u2018Does this pressure make him rethink leaving?’\u201d<\/p>\n Trump, who has said that anyone who disagrees with him cannot lead the central bank, is expected to name his pick for the next Fed Chair within weeks.<\/p>\n Kevin Hassett, the head of Trump\u2019s National Economic Council and a proponent of bigger interest rate cuts, has been widely tipped for the role, which requires confirmation by the US Senate.<\/p>\n Thom Tillis, one of the few Republican critics of Trump in the Senate, said on Sunday that he would oppose the nomination of Powell\u2019s successor until the legal case against him is resolved.<\/p>\n \u201cIf there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,\u201d said Tillis, who sits on the Senate\u2019s banking committee.<\/p>\n \u201cIt is now the independence and credibility of the Department of Justice that are in question.\u201d<\/p>\n Elizabeth Warren, a Democrat who also sits on the Senate\u2019s banking committee, accused Trump of orchestrating a \u201ccorrupt takeover\u201d of the central bank.<\/p>\n \u201cHe is abusing the law like a wannabe dictator so the Fed serves him and his billionaire friends,\u201d Warren said in a post on social media.<\/p>\n \u201cThe Senate must not move ANY Trump Fed nominee.\u201d<\/p>\n<\/div>\n United States President Donald Trump\u2019s administration has opened a criminal investigation into Federal Reserve Chair Jerome Powell, a development set to heighten concerns about the independence of US monetary policy. Powell said on Sunday that the US Department of Justice had served the Fed with subpoenas over testimony he made before Congress related to the […]<\/p>\n","protected":false},"author":1,"featured_media":8294,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-8293","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-us-canada-news"],"_links":{"self":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/8293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8293"}],"version-history":[{"count":0,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/8293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/media\/8294"}],"wp:attachment":[{"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Recommended Stories <\/h2>\n
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