Major escalation of battle between Trump administration and the central banker focuses on $2.5B reno of Fed HQ
Federal Reserve chair Jerome Powell is under criminal investigation relating to the testimony he gave to the Senate Banking Committee last June relating the the renovation of historic Federal Reserve office buildings.
In a statement late Sunday, Powell said that the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment. Officially, the investigation concerns what the Trump administration has called the "grossly mismanaged" $2.5 billion reno project and Powell acknowlegded in his statement that noone, not even the Fed, is above the law. But he claimed that the investigation has another motive.
"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. 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," he said in his statement.
He further stated that the action was about whether the Fed would maintain its independence to set interest rates based on its economic assessments, or if monetary policy would be under political pressure or "intimidation."
The Fed chair said that he has served at the Federal Reserve under four administrations, Republicans and Democrats alike and "In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people."
This is an unfolding story and WealthProfessional will have further updates.
