Republican Senator Thom Tillis of North Carolina criticized the subpoena, saying there is no doubt the Trump administration is actively pushing to end the Fed’s independence.
U.S. President Donald Trump has distanced himself from the Federal Reserve subpoena, emphasizing he knows absolutely nothing about it. Meanwhile, Fed Chair Jerome Powell vowed to stand firm, claiming that this unprecedented action is the broader context of the Trump administration’s threats.
President Trump said that although he knows nothing about it, the Fed chair was not very good at his job and is definitely not skilled at constructing buildings. However, Powell said the Justice Department was pressuring the Federal Reserve with possible criminal charges because the central bank set its benchmark rates based on key economic data, not the president’s preferences.
Meanwhile, Trump claimed that the Justice Department subpoenas have nothing to do with interest rates, adding that he would not even think of doing it that way if that were the case. The president went on to point out that Powell already had enough pressure from the fact that rates are far too high. Trump says pressure from the public is the only pressure Powell faces because he has hurt many people.
Jerome Powell, who currently serves on the Fed’s Board of Governors, said the threats of a criminal indictment are not about his testimony before the Senate Banking Committee last June or the Fed buildings’ renovations.
He pointed out that this is about whether the Fed will continue to set interest rates based on economic indicators or political expediency, emphasizing that the Fed will not bow to political intimidation.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. 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.”
-Jerome Powell, Chair of the Board of Governors of the Federal Reserve System
Powell said he will continue to do the job the Senate confirmed him to do, with integrity and a commitment to serving the American people. He added that he has deep respect for the law and the accountability in the U.S. democracy, noting that no one, including the Fed chair, is above the law.
Republican Senator Thom Tillis of North Carolina criticized the subpoena, saying there is no doubt that the Trump administration is actively pushing to end the Federal Reserve’s independence. He also noted that, while there should now be no doubt about the Trump administration’s involvement in the subpoena, it is the credibility and independence of the Department of Justice (DOJ) that are now in question.
Tillis further emphasized that he will oppose the confirmation of any Fed chair nominees appointed by Trump until this matter is fully resolved. Meanwhile, Trump has confirmed his choice for the Fed chair, although he has yet to make it public. Among the leading contenders are former Federal Reserve Governor Kevin Warsh and White House National Economic Council Director Kevin Hassett.
On the other hand, Federal Housing Finance Agency Director Bill Pulte is rumored to be the driving force behind the Fed subpoena. Trump is increasing pressure on the U.S. central bank through Pulte as he prepares to pick the next Fed chief, according to Bloomberg.
However, a senior administration official has pointed out that although the FHFA head has been pushing controversial housing policy ideas and is investigating Trump’s enemies for mortgage fraud, it is the DOJ, not Pulte, that is behind the subpoena.
The senior official also added that some of Trump’s close allies were shocked by the subpoena, fearing that the legal fight targeting Fed chair Powell could upset the bond market.
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