“Federal Reserve Chair Jerome Powellsaid Sunday the Department of Justice has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.
The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as quickly as Trump prefers. The subpoena relates to his testimony before the Senate Banking Committee in June, Powell said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump criticized as excessive.
Powell on Sunday cast off what has up to this point been a restrained approach to Trump’s criticisms and personal insults, which he has mostly ignored. Instead, Powell issued a video statement in which he bluntly characterized the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.
“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,” Powell said.”
https://www.yahoo.com/news/articles/federal-chair-powell-says-doj-005819943.html
A key part of keeping Peru’s currency stable are reforms that made their central bank independent from politicians. Trump is currently weakening this separation in the United States.
https://www.youtube.com/watch?v=vDayhEHc5OE
“Independence has underpinned financial markets’ trust in central banks for half a century and has provided much of the basis for the U.S.-led international economic order.
Across the Atlantic, Cook’s counterparts at the European Central Bank are alarmed that Trump’s moves could not only set a dangerous precedent — but also have a tangible impact on their own policymaking, which is inexorably influenced by the course charted by the Fed.
“Attacking the independence of the Fed, the Trump administration inflicts a serious damage to the American economy,” said Bank of Greece Governor Yannis Stournaras in emailed comments to POLITICO. “The implications will come sooner rather than later.”
When independence is threatened, monetary policy “becomes dysfunctional, it starts doing things that it shouldn’t do,” European Central Bank President Christine Lagarde told Fox News in an interview Sunday before Trump’s move to oust Cook, but after he had already signaled he wanted her out.
“The next step is disruption. It is instability, if not worse. So I think that this should not be debated,” Lagarde added.
…
Others expressed a similar wariness, with one Governing Council member, granted anonymity to candidly discuss the sensitive subject, fretting that a breach of the Fed’s independence could have “enormous repercussions on the financial world,” while also stressing the basic principle of due legal process that’s not been afforded to Cook.”
https://www.politico.eu/article/donald-trump-attack-federal-reserve-lisa-cook-alarm-europe-economic-stability/
Why Central Banks Are Launching Digital Currencies
https://www.youtube.com/watch?v=Dpu6G_UlSdM
https://www.cnbc.com/2022/12/20/bank-of-japan-shocks-global-markets-with-bond-yield-shift.html