Federal Reserve Chair Jerome Powell has thrown a bombshell, revealing that he was being punished by President Donald Trump for refusing to lower interest rates as quickly as the president demanded. In a video statement, Powell accused the Justice Department of weaponizing its power against the Federal Reserve's independence.
The allegations come after the Justice Department served grand jury subpoenas on the Fed, threatening criminal indictment against Powell for his June testimony before the Senate Banking Committee about the bank's building renovation project. The real reason behind the subpoenas, as stated by Powell, is that he refused to lower interest rates as Trump demanded.
This move has sparked outrage among lawmakers and experts, who argue that it's a brazen attempt to intimidate and punish an independent institution for refusing to bend to presidential will. The Federal Reserve was designed to be independent, with monetary policy decisions placed beyond presidential reach, in order to avoid inflation and instability.
The attacks on Powell come after months of escalating pressure from Trump, who has called for the Fed chair to be fired, accused him of incompetence, and mocked him publicly. The subpoenas are just the latest example of how Trump is trying to use the Justice Department to get what he wants.
Andrew Levin, a Dartmouth economist and former Federal Reserve official, warned that this kind of behavior sets a perilous precedent for the destruction of the Fed's independence. "The real reason...is that he refused to lower interest rates as quickly as Trump demanded," Powell stated plainly in his statement.
The irony is that the very rates Trump is obsessed with are the ones least susceptible to his bullying. If investors start to believe the Fed is a political plaything, they will demand a premium. Rates will go up, not down.
Powell's defiance has sparked a crucial debate about the limits of presidential power and the importance of an independent institution like the Federal Reserve. The stakes are high, as this issue goes to the heart of America's constitutional order and the rule of law.
The recent actions by Trump against Powell come at a time when the country is already grappling with the consequences of unchecked executive power. Trump has invented imaginary laws requiring 10% credit card interest rates, threatened to keep ExxonMobil out of Venezuela because its CEO was insufficiently enthusiastic about the administration's plans, and weaponized the Justice Department to go after political enemies, journalists, and now the chair of the Federal Reserve.
The question is whether America's leading executives will rise to the challenge and defend the institution like ordinary people would. Powell has taken a crucial step by standing up for the Fed's independence, and his bravery may be just what it takes to bridge the yawning chasm between bravery and cowardice among elites.
The allegations come after the Justice Department served grand jury subpoenas on the Fed, threatening criminal indictment against Powell for his June testimony before the Senate Banking Committee about the bank's building renovation project. The real reason behind the subpoenas, as stated by Powell, is that he refused to lower interest rates as Trump demanded.
This move has sparked outrage among lawmakers and experts, who argue that it's a brazen attempt to intimidate and punish an independent institution for refusing to bend to presidential will. The Federal Reserve was designed to be independent, with monetary policy decisions placed beyond presidential reach, in order to avoid inflation and instability.
The attacks on Powell come after months of escalating pressure from Trump, who has called for the Fed chair to be fired, accused him of incompetence, and mocked him publicly. The subpoenas are just the latest example of how Trump is trying to use the Justice Department to get what he wants.
Andrew Levin, a Dartmouth economist and former Federal Reserve official, warned that this kind of behavior sets a perilous precedent for the destruction of the Fed's independence. "The real reason...is that he refused to lower interest rates as quickly as Trump demanded," Powell stated plainly in his statement.
The irony is that the very rates Trump is obsessed with are the ones least susceptible to his bullying. If investors start to believe the Fed is a political plaything, they will demand a premium. Rates will go up, not down.
Powell's defiance has sparked a crucial debate about the limits of presidential power and the importance of an independent institution like the Federal Reserve. The stakes are high, as this issue goes to the heart of America's constitutional order and the rule of law.
The recent actions by Trump against Powell come at a time when the country is already grappling with the consequences of unchecked executive power. Trump has invented imaginary laws requiring 10% credit card interest rates, threatened to keep ExxonMobil out of Venezuela because its CEO was insufficiently enthusiastic about the administration's plans, and weaponized the Justice Department to go after political enemies, journalists, and now the chair of the Federal Reserve.
The question is whether America's leading executives will rise to the challenge and defend the institution like ordinary people would. Powell has taken a crucial step by standing up for the Fed's independence, and his bravery may be just what it takes to bridge the yawning chasm between bravery and cowardice among elites.
stats: 70% of economists agree that the Federal Reserve's independence is non-negotiable 
did you know? The Fed's inflation control measures have been shown to increase economic growth by up to 10% over a 5-year period 
Powell's bravery has sparked a necessary conversation about presidential power, with 80% of Americans supporting an independent Fed 
rates are not as susceptible to bullying as Trump thinks 
: if investors lose faith in the Fed's independence, interest rates will actually increase 
what does it mean for America's constitutional order? Powell's actions have a 25% chance of paving the way for future presidents to respect Fed independence 
Trump thinks he can weaponize the Justice Dept to get what he wants? Newsflash: the Fed isn't a game of Risk! 
the irony is real, like how trumps obsession with low interest rates will actually cause them to go up 
. and what about the message this sends to other countries and our own economy? it's a big deal and we should be paying attention 
powell stood up for what he believed in and now he's being threatened with a criminal indictment it's so messed up 
the fed was designed to be independent, not some political plaything where the prez just gets to dictate rates, it's just not how it works 
. Let's hope more people follow his lead and stand up for what's right! 
. And now the Justice Department is in on it too? 
That's just low. The irony is hilarious - Trump wants those interest rates to go up because everyone will start questioning the Fed's credibility 
. I mean, what's next? 
anyway i guess its pretty clear that the justice department is more interested in protecting trump's ego than actual justice 
but hey at least the fed is standing up for itself and not getting bullied into doing whatever trump wants 
. I mean, come on, Trump is basically trying to strong-arm the Fed into doing his bidding? 
. It's like Trump thinks he can just game the system and get away with it, but really he's putting the entire country at risk.
. The irony is that rates are already pretty much set in stone, but if people start thinking the Fed is a puppet of the presidency, interest rates will actually rise 
. This whole thing just highlights how messed up it's gotten with all these investigations and subpoenas 
.
. The guy's been doing his job to the best of his abilities, and he's pushing back against Trump's demands because that's what independent institutions do 
. I'm kinda loving this response from Powell, though - it shows some serious backbone 
, he's standing up for what's right and defending the institution that's meant to protect us from economic chaos. It's like he's saying, "Hey, Trump, you can't just bully me because you don't like my decisions". This is a huge step forward in reminding everyone of the importance of an independent Fed and keeping our politicians accountable 
I'm shocked that Trump is trying to strong-arm the Fed into doing his bidding like this... back in my day we used to think of politicians being above the law 
. I mean, come on, the Fed is supposed to be independent for a reason! It's like he thinks he can just bully anyone into doing what he wants and gets away with it 
. The thing is, if the public starts to lose faith in the Fed, interest rates would skyrocket and hurt ordinary people who are just trying to save money 
.