US Fed Chair is under criminal investigation
What's the story
The US Justice Department has launched a criminal investigation into Federal Reserve Chair Jerome Powell, he said on Sunday. The probe comes after Powell's testimony to a Senate committee about renovations to Federal Reserve buildings. In a video announcing the probe, Powell said he was served with subpoenas and threatened with a criminal indictment over his statements. He called the investigation "unprecedented," implying it was influenced by his resistance to political pressure from President Donald Trump regarding interest rates.
Concerns raised
Powell questions independence of Federal Reserve amid investigation
Powell has expressed concerns that the investigation could compromise the independence of the Federal Reserve in setting interest rates. He said, "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." The probe is being handled by the US Attorney's Office for DC.
Defense strategy
Powell defends his actions amid investigation
In his video, Powell defended his actions and said he respects the rule of law and accountability in democracy. He added, "No one, certainly not the chair of the Federal Reserve is above the law." However, he also stressed that this unprecedented action should be viewed in light of ongoing pressure from the administration.
Presidential response
Trump comments on Powell's investigation
Responding to the investigation, President Trump said he was unaware of it but criticized Powell's performance at the Federal Reserve and his handling of building projects. The probe marks a new chapter in Trump's ongoing conflict with Powell, whom he appointed as Fed Chair in 2017. Despite Trump's threats to fire him for not cutting interest rates quickly enough, Powell has remained in his position.
Independence concerns
Incident raises questions about Federal Reserve's independence
The investigation into Powell has raised concerns about the independence of the Federal Reserve. Critics fear Trump's pressure to fire Powell could compromise the institution's ability to set interest rates independently from presidential influence. North Carolina Senator Thom Tillis, a Republican on the Senate Banking Committee, said he would oppose any nominee to replace Powell until this legal matter is fully resolved.