US prosecutors open criminal probe into federal reserve

US prosecutors have launched an inquiry that could lead to a criminal indictment of the Federal Reserve, Chairman Jerome Powell said on Sunday, January 11, accusing the Trump administration of escalating threats and ongoing pressure over monetary policy. Powell appeared in a video statement confirming that the central bank received grand jury subpoenas on Friday, January 9, related to his June Senate testimony about renovation costs for Federal Reserve office buildings. He described the subpoenas as pretexts linked to months of conflict with President Donald Trump, who has repeatedly criticized the Fed for not cutting interest rates more aggressively. 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, Powell said. He called the move an unprecedented action and part of the administrations broader campaign of threats and ongoing pressure. The inquiry comes as Trump has intensified public attacks on Powell since winning re-election, demanding faster rate cuts in a break with decades-long norms around Fed independence. The central bank is mandated to keep inflation low and unemployment stable, using interest rates as its main tool. Trump told reporters he had no knowledge of the Justice Departments inquiry. I dont know anything about it, but hes certainly not very good at the Fed and hes not very good at building buildings, he said when asked about Powell. Markets reacted nervously as trading opened Monday, January 12, with the US dollar weakening against major currencies and benchmark 10-year Treasury bonds sliding. Gold prices rose amid uncertainty. Strategists warned that further political interference could hit investor confidence, with INGs Francesco Pesole noting the market mood resembled the sell America sentiment seen during Trumps trade tariff disputes. Lawmakers from both parties condemned the investigation as a threat to the central banks independence. Republican Senator Thom Tillis said the Justice Departments credibility was now at stake, adding that he would block confirmation of any new Fed nominees until this legal matter is fully resolved. Democratic Senate leader Chuck Schumer accused the administration of targeting anyone who refused to fall in line behind Trump, calling it an assault on the institution. Powells term expires in May, and Trump has signaled he will choose a successor based on their willingness to cut rates immediately. The president has previously suggested removing Powell but instead focused criticism on cost overruns at the Feds Washington headquarters, where renovation estimates rose by roughly $600 million last year. Trump made a surprise visit to the construction site in July, where he and Powell, wearing hard hats, argued over the price tag in front of staff.The post US prosecutors open criminal probe into federal reserve appeared first on Linda Ikeji Blog.