Federal Reserve Chair Jerome H. Powell on January 11 said he would continue to discharge his duties with integrity after Federal prosecutors have launched a criminal investigation into the Federal Reserve’s
roughly $2.5 billion renovation of its headquarters in Washington, DC.
While assuring deep respect for the rule of low and for accountability in the democracy, Powell, in a strong-worded statement, said “this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Fed Chair further stated that this new threat isn’t about the renovation project or congressional oversight, as the Fed had made consistent efforts to keep lawmakers informed through testimony and public disclosures. “Those are pretexts,” he added.
Powell alleged that the threat of criminal charges stemmed from the Fed’s refusal to align interest rate decisions with the preferences of the President of the United States, instead relying on data and economic conditions.
“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,” he added.
Fed Chair said he had served at the Federal Reserve under four administrations, Republicans and Democrats alike and carried out his duties without political fear or favor, focused solely on their mandate of price stability and maximum employment.
Saying public service requires standing firm in the face of threats, he said he would continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.
The tussle between former US President Donald Trump and the Federal Reserve over interest rates has been a long-running one. During his tenure, Trump repeatedly criticised the central bank for not cutting rates aggressively, arguing that lower borrowing costs were needed to support growth and markets. He frequently targeted Fed Chair Jerome H. Powell in public remarks, blaming the central bank for slowing the economy. The Federal Reserve, however, maintained that rate decisions were guided by inflation, employment and overall economic conditions, not political demands.
