Federal Reserve Engages in Closed-Door Legal Battle Over DOJ Subpoenas Targeting Powell

According to The Wall Street Journal, the Federal Reserve is mounting a legal challenge in closed-door proceedings against two subpoenas issued by the U.S. Department of Justice.

These subpoenas were issued by federal prosecutor Jeanine Pirro, targeting Federal Reserve Chairman Jerome Powell for a criminal investigation focused on whether he made false statements during his testimony before Congress last summer regarding the Fed's building renovation project.

Pirro is a long-time political ally of former President Trump. The investigation she initiated has sparked widespread public controversy upon its announcement. The Fed's proactive legal challenge further brings the debate over the legitimacy of the investigation into the public eye.

Notably, Powell previously spoke out publicly in a video statement, directly asserting that the true purpose of the investigation is that Trump is attempting to pressure the Fed into cutting interest rates, thereby undermining the independence of the Fed's decision-making.

Currently, the Fed has filed a non-public motion with the court to revoke the relevant subpoenas, aiming to exempt itself from legal obligations to cooperate with the investigation. Due to the confidentiality requirements of the grand jury criminal investigation, the legal tug-of-war between the Fed and prosecutors has not disclosed further details.

In summary, this incident further highlights that the independence of the Federal Reserve is under serious scrutiny and challenge. As Raphael Bostic, the retiring President of the Atlanta Fed, stated, the legal disputes and public debates surrounding the Fed have led markets and the public to broadly question the central bank's independence.

He also emphasized that the Fed is under unprecedented pressure from the Trump administration to cut interest rates, with efforts even underway to dismiss Fed officials to secure an absolute voting majority.

Overall, this escalating "subpoena battle" has become a core battleground for defending the independence of the Fed's decision-making.

#美联储 #Department of Justice