Trump administration opens criminal probe into Fed Chair Jerome Powell

BREAKINGBREAKING,

Central bank chair condemns ‘intimidation’ following grand jury subpoenas.

United States President Donald Trump’s administration has opened a criminal opened into Federal Reserve Chair Jerome Powell, a development set to heighten concerns about the independence of US monetary policy.

Powell said on Sunday that prosecutors had served the Fed with subpoenas over testimony he made before the US Congress related to the $2.5bn renovation of the central bank’s headquarters in Washington, DC.

Recommended Stories

• list 1 of 4Israeli forces kill one person in series of attacks on southern Lebanon
• list 2 of 4Barcelona beat Real Madrid in El Clasico to retain Spanish Super Cup
• list 3 of 4Trump administration opens criminal probe into Fed Chair Jerome Powell
• list 4 of 4Denmark’s PM says Greenland showdown at ‘decisive moment’

Powell, whose tenure as Fed Chair is due to expire in May, said concerns about the renovation project were “pretexts” to undermine the central bank’s independence in setting interest rates.

“The 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,” Powell said in a rare video message.

“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.”

Powell added that he had carried out his duties “without political fear or favour” and with the sole purpose of upholding the central bank’s dual mandate of price price stability and maximum employment.

“Public service sometimes requires standing firm in the face of threats,” he said.

“I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”

Trump has repeatedly threatened to fire Powell over his refusal to cut interest rates faster, and is waging a legal battle to remove Powell’s fellow board governor Lisa Cook after ordering her removal in August.

Trump’s pressure campaign has raised fears about the continuing independence of the central bank, whose ability set interest rates free from political considerations is considered crucial to maintaining confidence in the US economy.

Under US law, the president may only fire the Fed chair “for cause”, a provision widely interpreted to mean specific misconduct, not differences over policy.

“Much to the President’s frustration, the legislative architects of the modern Fed turn out to have been good at their craft,” 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.

“They 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.”

More to follow…