Let's talk about Trump going after Fed Chair Jerome Powell.... - Belle of the Ranch

[TexasTowelie]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about Trump going after Fed Chair Jerome Powell.

The reporting has come out that the DOJ has opened a criminal investigation of Federal Reserve Chairman Jerome Powell, which is said to be related to the project to renovate historic Federal Reserve office buildings. A DOJ spokesperson spoke without mentioning Powell directly and said “the attorney general has instructed her US attorneys to prioritize investigating any abuse of taxpayer dollars.”

The news is likely to send shock waves through economic circles. The notoriously nonpartisan Federal Reserve chair put out a lengthy statement and I'm going to read a pretty big chunk of it. It says, "On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings. I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve, is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role. The Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. 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. 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 and intimidation.”

Okay. So, the tensions between Trump and Powell have been an ongoing feature of Trump's second term. Trump has repeatedly pushed the Federal Reserve to cut interest rates faster. Powell and the rest of the Federal Reserve have been concerned about reigniting inflation. The details of the probe aren't really fully known yet, but the appearance of the probe being linked to the dispute between the two is the topic of conversation in economic circles.

Jerome Powell spent large portions of his career trying to avoid any appearance of partisanship, even down to being careful about the color of his tie. Being caught up in what many see as a partisan probe shortly before his term as chair of the Fed ends probably isn't what he had in mind. This is going to be an ongoing story creating a scandal and a bunch of uncertainty at the Fed while the markets are detached from reality and we're getting one bad economic indicator after another. Probably isn't the best situation.

Anyway, it's just a thought. Y'all have a good day.