DOJ opens investigation into Fed chair Jerome Powell
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The news: Federal Reserve chair Jerome Powell has confirmed that the US central bank has been served grand jury subpoenas from the Department of Justice (DOJ) threatening a criminal indictment.
The context: In a written and video statement, Powell said the "unprecedented action" was related to his testimony before the Senate Banking Committee last June, which partly concerned a multi-year project to renovate the Fed's office buildings.
Powell said the DoJ's move "should be seen in the broader context of the administration's threats and ongoing pressure". The subpoenas were received by the Fed on Friday.
US President Donald Trump appears to have escalated his longstanding feud with Powell, after publicly demanding more aggressive rate cuts and pledging to fire him. Trump has also sought to fire Fed governor Lisa Cook, with a Supreme Court case scheduled for later this month.
What they said: "This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings," said Powell.
"It is not about Congress's oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts.
"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.
"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 source: Federal Reserve media release
