JPMorgan CEO: "Trump's Attacks on the Fed Will Drive Up Inflation"

Expressing Deep Concern Over Government’s Undermining of Fed Independence
Strong Support Voiced for Chairman Powell
Trump Attacks Chairman Powell in Detroit

Jamie Dimon said, "Anything that undermines the Fed's independence is not a good idea." Photo by Win McNamee/Getty Images

Jamie Dimon, CEO of JPMorgan, warned that political attacks on the Federal Reserve (Fed) by the Trump administration could have adverse effects, including rising inflation.

According to the Financial Times (FT) on January 13 (local time), CEO Dimon told reporters during JPMorgan’s fourth-quarter earnings announcement, "Anything that chips away at the Fed’s independence is probably not a great idea."

He added, "Such actions will likely backfire," explaining that they could raise inflation expectations and potentially lead to higher interest rates in the long term. He continued, "I have great respect for Chairman Powell," and strongly expressed his support for the Fed’s independence.

Jeremy Barnum, Chief Financial Officer (CFO) of JPMorgan, also agreed with CEO Dimon's warning. He pointed out, "The bigger problem is that it undermines the outlook for the U.S. economy and, frankly, even the stability of the global economy."

Robin Vince, CEO of Bank of New York Mellon, also stated during the earnings announcement that day, "We should not shake the foundation of the bond market or do anything that could potentially raise interest rates," and criticized that "there is a lack of trust in central bank independence."

Previously, the U.S. Department of Justice issued a subpoena to indict Chairman Powell on perjury charges related to the remodeling of the Fed building. In response, Chairman Powell issued a public statement, describing the investigation as an unprecedented threat from the administration to the Fed’s independence. Both inside and outside the Fed, there has been growing support for Chairman Powell, with many viewing the administration’s actions as undermining the Fed’s independence.

In support of Chairman Powell, 11 central bank governors from around the world, including the European Central Bank (ECB) and the Bank of Korea, issued a statement saying, "Central bank independence is the cornerstone of price, financial, and economic stability in the interests of the citizens we serve," and expressed their full solidarity.

Meanwhile, U.S. President Donald Trump, during a visit to the Ford Motor plant in Detroit, Michigan, on January 13, said of Chairman Powell, "I hope he will soon step down from his position." He added, "We have a bad Fed chairman. He is bad in many ways, but especially for keeping interest rates too high."