On Sunday, Fed Chairman Jerome Powell announced that the Department of Justice has launched an investigation into his testimony before Congress about cost overruns of renovations at the Fed’s headquarters in D.C.

“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,” said Powell. “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.”

The leaders of ?the European Central Bank, the Bank of England, ?the Bank of Canada and eight other institutions defended Powell, saying he has acted with integrity and that central bank independence is crucial for keeping prices and financial markets stable.

A group of former Treasury secretaries and Fed chairs, including Ben Bernanke and Alan Greenspan, also issued a joint statement of support. Citing the “unprecedented attempt to use prosecutorial attacks,” they said:

“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.”

Author: sdbrownlow

Student of Design