Former Fed chairs, Treasury chiefs condemn Trump administration's Jerome Powell probe

[ad_1] Three former chairs of the Federal Reserve and different prime former financial officers are rebuking the Division of Justice for launching an investigation into Fed Chair Jerome Powell , saying the probe will undermine the central financial institution's independence and damage the U.S. economic system.

The assertion, posted on Substack on Monday, was signed by former Fed Chairs Janet Yellen, Ben Bernanke and Alan Greenspan, in addition to by former Treasury Secretaries Timothy Geithner, Jacob Lew, Henry Paulson and Robert Rubin.

"The reported prison inquiry into Federal Reserve Chair Jay Powell is an unprecedented try to make use of prosecutorial assaults to undermine that independence," the signers of the assertion mentioned. "That is how financial coverage is made in rising markets with weak establishments, with extremely adverse penalties for inflation and the functioning of their economies extra broadly.

President Trump has pushed the Fed to extra aggressively reduce rates of interest, arguing that the U.S. economic system would profit from decrease borrowing prices.

Powell has lengthy defended the central financial institution's independence on the grounds that shielding the Fed from political affect permits financial coverage makers to make goal choices based mostly on financial information, slightly than the pursuits of elected officers.

Justice Division subpoenas to the Fed threaten a prison indictment associated to Powell's testimony earlier than the Senate Banking Committee in June 2025 , Powell mentioned in a video assertion on Sunday.

"That testimony involved partly a multi-year mission to renovate historic Federal Reserve workplace buildings," Powell mentioned.

The Fed's independence was underscored in Monday's letter from the previous Fed chairs, Treasury secretaries and different officers.

Different former senior financial officers to signal the assertion: Jared Bernstein, chair of the Council of Financial Advisers (CEA) below former President Joe Biden; Jason Furman, CEA chair below former President Barack Obama; Glenn Hubbard and Gregory Mankiw, who each led the CEA below former President George W. Bush; Kenneth Rogoff, former chief economist of the Worldwide Financial Fund; advert Christina Romer, CEA chair below Obama.

"The Federal Reserve's independence and the general public's notion of that independence are crucial for financial efficiency, together with reaching the objectives Congress has set for the Federal Reserve of steady costs, most employment, and reasonable long-term rates of interest," the signers wrote.