Powell Says Criminal Indictment Is Political Pressure on Interest Rate Decisions

Powell Issues Statement on Federal Prosecutors' Subpoena
"Political Pressure on Monetary Policy... I Will Stand Firm"

Jerome Powell, Chairman of the Federal Reserve (Fed)

Jerome Powell, Chairman of the Federal Reserve (Fed), criticized the subpoena issued by federal prosecutors regarding the remodeling of the Fed building, stating, "This unprecedented action should be viewed in the context of threats and ongoing pressure from the administration."

According to Bloomberg on January 11 (local time), Chairman Powell said in a written and video statement, "The criminal indictment occurred because the Fed decided on the benchmark interest rate based solely on what is best for the people, rather than following the wishes of the President."

He emphasized, "This new threat is not related to my testimony last June or the building renovation, nor is it about congressional oversight. It is merely a pretext."

Chairman Powell pointed out, "This is a question of whether the Fed can set the benchmark interest rate based on economic conditions, or whether monetary policy will be swayed by political pressure." He added, "Public service sometimes requires standing firm against threats," and concluded, "I will continue to fulfill my duties for the American people, as confirmed during my Senate confirmation hearing."

President Trump has repeatedly and publicly pressured Chairman Powell to lower the benchmark interest rate. He has also suggested the possibility of Powell’s dismissal and hinted at lawsuits related to the Fed’s remodeling.

Last month, the Fed Board lowered the benchmark interest rate to 3.5%-3.75%, marking the third consecutive monthly cut. Subsequently, Fed governors indicated that there would be no further cuts until additional data on inflation and employment becomes available.

Meanwhile, on January 9, the U.S. Attorney’s Office in Washington, D.C. issued a subpoena to Chairman Powell. Federal prosecutors are reportedly investigating allegations that Powell gave false testimony regarding the details of the Fed building renovation during a Senate Banking Committee hearing in June of last year.