Chairman of the Federal Reserve Powell is under criminal investigation
According to CNN, federal prosecutors have launched a criminal investigation into whether Federal Reserve Chairman Jerome Powell lied to Congress in June about the $250 million renovation project at the Fed's Washington headquarters.
On Sunday evening, Powell released a video statement saying that this investigation is a direct result of his ongoing dispute with the government over interest rates. He called it the result of the government's broader "threats and sustained pressure."
In his statement, Powell said, "The threat of criminal charges is the result of the Fed setting interest rates based on our best assessment of the public interest, rather than following the president's preferences."
The report said that this investigation sends a chilling message to Powell - and anyone who may lead the Fed in the future. President Donald Trump's continuous attacks on the Fed chairman have been undermining the Fed's traditional political independence. Trump even stated that he should have a say in interest rate decisions.
However, this criminal investigation has raised the conflict between Trump and the Fed to a new level. It indicates that whoever Trump chooses to succeed Powell after his term ends in May will face continued pressure from the government to lower interest rates.
Global investors and economists place great importance on the independence of the Federal Reserve. Independence ensures that policymakers consider long-term impacts when making monetary policy, rather than short-term political preferences, thus leading the economy more stably.
In his Sunday statement, Powell directly linked the investigation to the Fed's independence and its ability to set interest rates without political interference.
He said, "This is about whether the Fed can continue to set interest rates based on evidence and economic conditions - or whether monetary policy will be influenced by political pressure or intimidation."
Powell's term will end in May 2026. Trump criticized him for moving too slowly on rate cuts, calling him "slow to act." Since the month Powell took office, Trump has repeatedly demanded his resignation, but has not dismissed him. Experts believe that the reason for not firing Powell was to avoid damaging market confidence in the government's monetary policy and the Fed's independence.
Original article: toutiao.com/article/1854080238052360/
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