Speaking to the American people on Sunday, Jan 11, Powell said the US central bank had been served grand jury subpoenas threatening a criminal indictment related to his June congressional testimony on renovations of the Fed’s headquarters. In his strong response, he characterised the scrutiny of the renovations and his testimony last year as mere pretexts.
These are officially the darkest days for Federal Reserve independence since at least the Nixon administration. After attacking Fed Governor Lisa Cook last year, President Donald Trump is now weaponising the Justice Department against Chair Jerome Powell in a thinly veiled effort to intimidate him into lowering interest rates against the best interests of the American people. It’s the sort of treatment that you’d expect in a tin-pot banana republic, and it will be a stain on America’s reputation for years to come.
The attack is a sign of why America needs principled leaders at its central bank — and why Powell himself should opt to stay on as a governor after his chairmanship ends in May.
