Federal prosecutors in DC are investigating Federal Reserve Chair Jerome Powell over his June testimony on the ongoing renovation of the central bank’s headquarters, Powell said Sunday.
In an uncharacteristically blunt statement, Powell linked the probe to the Fed setting interest rates independently “rather than following the preferences of the president.” He added that “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.”
Soon after, the dollar fell and gold hit a record high.
The dramatic escalation of President Donald Trump’s ongoing campaign to pressure the central bank over rates is already pressing some swing votes for the next Fed chair nominee: Sen. Thom Tillis, R-N.C., said in a statement he would withhold votes from any Fed pick “until this legal matter is fully resolved.”
That wouldn’t doom a confirmation on its own, but given the GOP’s narrow majority on the Senate Banking Committee, it would mean a tie vote that would require extra steps from party leaders to break.
Trump told NBC Sunday night that he had no knowledge of the impending Justice Department probe and denied that it was meant to pressure the Fed into lowering rates.