Federal Reserve Chair Jerome Powell revealed in a video posted to the central bank’s website on Sunday that the Fed had been served with grand jury subpoenas on Friday by the Department of Justice, and threatened with a criminal indictment over Powell’s testimony in front of the Senate Banking Committee last summer.
That testimony was, in part, regarding the Fed’s $2.5 billion project to renovate the Fed’s D.C.-headquartered offices. But in his address, Powell said this new legal threat against the Fed had nothing to do with the project, which served as a “pretext” for the DOJ’s actions, which he said were politically motivated.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said. “It is not about Congress’s oversight role; the Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether, instead, monetary policy will be directed by political pressure or intimidation,” Powell added.
President Trump has closely scrutinized Powell and the Fed’s moves since taking office, threatening to fire Powell on multiple occasions if he could not bring interest rates down further as Americans combat the effects of inflation.
Meanwhile, the weekly average mortgage rate hit a one-year low at the end of December at 6.15 percent, according to Redfin.
Powell has not been the only person at the Fed under the president’s close watch. Trump also accused Fed Governor Lisa Cook of mortgage fraud and said he had removed her from office over the summer. Cook then sued the president over her “unprecedented and illegal” firing and has remained in her position as a governor after a federal judge and an appeals court sided with Cook. The Supreme Court is set to hear the case on Jan. 21.
Fed Governor Adriana Kugler resigned in August and Fed Governor Raphael Bostic announced late last year that he would retire once his term ends in February, moves that fostered speculation over the president attempting to undermine the Fed’s independence by influencing the appointments of regional bank presidents.
In closing his statement on Sunday, Powell reaffirmed his commitment to keeping his integrity in the face of political pressures.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike,” Powell said. “In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.
“Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
