Central bank leaders back Jerome Powell as US prosecutors subpoena the Fed chair

Yahoo
Yahoo
37m ago
Major central bank leaders issued a joint statement backing Federal Reserve Chair Jerome Powell as US prosecutors subpoenaed him and threatened a criminal indictment tied to a $2.5 billion Fed headquarters renovation.
Central bank leaders back Jerome Powell as US prosecutors subpoena the Fed chair
A What happened
Major central bank leaders issued a joint statement saying it was critical to preserve central bank independence and expressing full solidarity with the US Federal Reserve and Chair Jerome Powell. US prosecutors issued subpoenas against Powell threatening a criminal indictment in an inquiry concerning a $2.5 billion renovation of the Fed headquarters in Washington. Powell publicly rebuked the inquiry and said he would continue setting monetary policy without political fear or favor, calling the renovation issue and his Senate testimony about it pretexts. President Donald Trump accused Powell of being billions of dollars over budget and said Powell was either incompetent or crooked.
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Key insights

  • 1

    Central bank leaders argued independence is essential for stability: The joint statement said central bank independence is a cornerstone of price, financial, and economic stability in the interest of citizens.

  • 2

    Jamie Dimon warned pressure on the Fed could backfire: Dimon said anything that chips away at Fed independence is probably not a great idea and, in his view, would have reverse consequences.

  • 3

    Powell said the criminal-charge threat stems from policy independence: Powell said the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on its best assessment of the public interest rather than following the president’s preferences.

Takeaways

International central bank leaders, former Fed officials, and some US lawmakers publicly backed Jerome Powell while a US criminal probe and subpoenas focused on the Fed headquarters renovation continued.

Topics

Business & Markets Markets Economy World & Politics Policy & Regulation Governance

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