Former Fed Leaders Condemn Criminal Investigation against Jerome Powell

Condemnation from Economic Leaders

Three former leaders of the U.S. central bank have condemned the federal prosecutors' criminal investigation into President Jerome Powell, calling it an "unprecedented" attempt to undermine the independence of the Federal Reserve.

In a statement issued on Monday, 10 leaders in economic policy, including four former Treasury secretaries, rallied behind Powell. They emphasized the importance of the Federal Reserve's independence and public perception for economic health, asserting that "the investigation has no place in the United States, where our greatest strength is the rule of law that underpins our economic success."

They noted that "this is how monetary policy is crafted in emerging markets with weak institutions, leading to very negative consequences for inflation and the overall functioning of their economies." Among the signatories of this statement were federal officials appointed by both Democratic and Republican presidents.

The statement came just a day after Powell revealed that the U.S. Department of Justice (DoJ) had issued him a subpoena and threatened criminal charges related to his testimony before a Senate committee on renovations to Federal Reserve buildings. Powell described the investigation as "unprecedented" and suggested it might stem from President Donald Trump's anger over the Fed's interest rate decisions.

According to Powell, the investigation "should be viewed in the broader context of ongoing threats and pressures from the administration." Trump has publicly called for adjustments to interest rates to lower the government's borrowing costs and facilitate access to loans for Americans.

Last year, Trump consistently attacked Powell on social media and in statements to journalists. He repeatedly hinted at the possibility of firing him, only to quickly backtrack, which analysts say could destabilize financial markets and lead to a legal battle. Trump claimed he knows "nothing" about the investigation. The Department of Justice was contacted for comments.