The chairman of the US federal reserve says the Department of Justice has threatened him with criminal charges
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The Chairman of the US Federal Reserve, Jerome Powell, said on Sunday that the Trump administration threatened to indict him and give him to the grand jury regarding the testimony of the Congress that he gave last summer about the renovation project of the Fed building, an act that Powell called a “pretext” aimed at putting pressure on the central bank to lower interest rates.
“On Friday, the Department of Justice subpoenaed the Federal Reserve, and threatened criminal charges related to my testimony before the Senate Banking Committee last June,” Powell said in a statement Sunday, marking the biggest escalation in the battle between himself and Donald Trump since Powell’s first years as chairman in 2018.
“I have great respect for the rule of law and accountability in our democracy. No one—certainly not the chairman of the Federal Reserve—is above the law,” Powell said in a brief statement released by the Fed on Sunday.
“But this unprecedented action should be seen in the broader context of management threats and ongoing pressure,” said the low interest rates.
The White House declined to comment, referring questions to the Justice Department.
Trump has called for the Fed to cut rates the most since taking office in January, blaming its policy for holding back the economy and considering firing Powell despite legal protections that cover the Fed chairman from being removed over a policy dispute.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve. It is not about the oversight role of Congress,” Powell said.
“That’s an excuse. The threat of criminal charges is the result of the Federal Reserve setting interest rates based on our best assessment of what will benefit the public, rather than following the President’s preferences.
The war is growing between Trump and the Fed
The subpoenas and Powell’s statement mark a major escalation in Trump’s battle to influence the Fed and in his relationship with Powell, who has largely avoided commenting on the President’s actions or statements, instead acknowledging that senior executives often express opinions on various issues.
However, the latest steps of the Trump administration, which came within months of the end of Powell’s term as chairman in May, seem to have been a major change, when Powell directly accused the administration of using the legal system to try to achieve their goal of making the Fed lower interest rates faster and faster than the central bank’s body of 19 policy makers sees fit.
The White House began early last year criticizing the Fed’s $2.5 billion renovation of its two buildings in Washington, describing it as expensive and ostentatious.
Some commentators at the time called it an excuse for the Trump administration’s pressure campaign on low interest rates, but Powell did not, instead posting detailed job descriptions on the Fed’s website and sending letters to members of the Trump administration providing background.
In June, when Powell gave his usual biannual testimony on fiscal policy to Congress, he was repeatedly asked about the job, which he described as needed updates to outdated infrastructure. In July, Trump made a rare presidential visit to the site, and Powell visited him.
