Earlier this month, the Trump administration surprised Washington by opening a criminal probe into Federal Reserve Chair Jerome Powell, accusing him of misleading Congress over a $2.5B building renovation. 🚨
Powell fired back, calling the move a 'pretext' to sway interest rates and undermine the Fed's independence. 'No one—certainly not the chair of the Federal Reserve—is above the law,' he said, stressing that rate decisions are based on public interest, not political pressure.
This week, former Fed chairs Janet Yellen, Ben Bernanke, and Alan Greenspan—joined by bipartisan ex-policy leaders—issued a rare joint statement warning that using prosecutorial tactics to target the Fed chief could shake market confidence and fuel higher inflation. 📈
Key points from the statement:
- Fed independence matters: It's the backbone of stable prices and healthy job growth.
- Politicizing the central bank risks higher borrowing costs for everyone.
- Rule of law is vital to keep markets steady and economies on track.
Senators from Trump's own party, including Thom Tillis, Kevin Cramer, and Lisa Murkowski, criticized the DOJ's threat, with Tillis vowing to block any new Fed nominees until the issue is resolved. Yet some like House Speaker Mike Johnson have remained quiet, saying they'll let the process 'play out.'
Investors are watching closely as long-term U.S. Treasury yields tick up, a sign that higher borrowing costs could hit home budgets across the globe, from Manila to Mumbai. 🌏💸
What's next? A Supreme Court hearing is looming over Trump's bid to remove another Fed governor, and Powell's term ends in May—though he could stay on the Board until 2028. Stay tuned as this story unfolds and central banking meets politics head-on. 🔍
For young pros in South and Southeast Asia, the stakes extend beyond Wall Street: central bank independence shapes inflation, jobs, and the global tech boom—from Bengaluru's startups to Jakarta's fintech scene. 🤝✨
Have thoughts? Share with us in the comments below! 👇
Reference(s):
cgtn.com
