Amid growing concerns about the Federal Reserve’s independence, US President Donald Trump continued his harsh criticism of Federal Reserve Chairman Jerome Powell.
Speaking to reporters in front of the White House, Trump accused Powell of being “either incompetent or corrupt.”
Trump’s remarks came amid growing criticism from both Democrats and Republicans of the unprecedented criminal investigation launched by the US Justice Department against Powell. Responding to a question about whether the investigation undermined public trust in the Fed, Trump accused Powell of exceeding the budget by billions of dollars for renovations to the Fed building in Washington. “He exceeded the budget by billions of dollars. So he’s either incompetent or corrupt. I don’t know which it is, but what’s certain is that he’s not doing his job well,” he said.
Trump’s remarks came on a day when strong statements were being made regarding the need to protect the Federal Reserve’s independence from the executive branch. JPMorgan Chase CEO Jamie Dimon, in a statement after announcing the bank’s fourth-quarter financial results, said, “We all believe in the independence of the Fed. Any action that would harm it is not a good idea. On the contrary, it would raise inflation expectations and eventually lead to higher interest rates.”
Similar criticisms came from Republican senators as well. John Kennedy, a member of the Senate Banking Committee, stated that a power struggle between the Fed and the executive branch would guarantee interest rates rise, not fall, adding, “We don’t need that.”
On the other hand, Washington D.C. Attorney General Jeanine Pirro stated in a late-night announcement that her office had no intention of withdrawing the legal proceedings against Powell and the Fed. Pirro said they had repeatedly tried to contact the Fed but received no response, arguing that this was the reason for initiating the legal process. “No one is above the law. Therefore, we expect full cooperation from the Fed Chairman,” she said.
*This is not investment advice.
