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Fed Chair Pushes Back Against DOJ Legal Threats

"This 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."
Jerome Powell, Chair, Federal Reserve Board
"This 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."
Jerome Powell, Chair, Federal Reserve Board

Federal Reserve Chair Jerome H. Powell characterized recent Department of Justice subpoenas as "pretexts" to pressure the Fed to lower interest rates.

In a statement, Mr. Powell disclosed that the DOJ served the Federal Reserve with grand jury subpoenas threatening criminal indictment. The subpoena was based on Mr. Powell's testimony on renovating Fed property. He asserted that this "unprecedented action" is not about oversight or renovations but is a consequence of the Fed setting interest rates based on economic data rather than the "preferences of the President."

Mr. Powell argued the situation tests whether monetary policy will be guided by evidence or "political pressure or intimidation." He affirmed his commitment to the independence of the Fed, stating he will continue to serve "without political fear or favor" and remains focused on the agency's mandate of price stability and maximum employment despite the threats.

Primary Sources

  1. Federal Reserve Board: Statement from Federal Reserve Chair Jerome H. Powell

Tags

Individuals
Jerome H. Powell
Regulated Entities
Regulatory Agencies
Body of Law
Banking Law
Jurisdiction
US - Federal
Organization
US Banking Regulators
Sub-Author
Federal Reserve Board