A bipartisan group of top economic officials called the DOJ probe into Jerome Powell an «unprecedented attempt» to undermine the Fed’s independence.
The Justice Department investigation into Federal Reserve Chairman Jerome Powell is sparking backlash from former Federal Reserve and Treasury officials as well as current members of Congress, including those in President Donald Trump’s own party.
A bipartisan group of top economic officials released a blistering statement on Monday calling the probe an «unprecedented attempt to use prosecutorial attacks to undermine» the central bank’s independence.
«This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success», read the statement from Alan Greenspan, Ben Bernanke, Janet Yellen, Tim Geithner, Jacob Lew, Hank Paulson and others.
The investigation, announced by Powell in a rare video message on Sunday, is related to Powell’s testimony last June about the multi-year renovation of the Federal Reserve buildings in Washington. But Trump has made Powell a frequent target of his attacks and push to cut interest rates.
White House National Economic Council Director Kevin Hassett, who is on Trump’s short list to be the next Federal Reserve chair, said time will tell if the probe is a pretext for firing Powell over interest rates.
“Well, in the fullness of time, we’ll find out whether it looks like a pretext», Hassett, who denied involvement in the probe, told CNBC in an appearance on Monday.
