Republicans Break with President Over Indictment of Federal Reserve Chair

Former Federal Reserve Chairs Condemn Trump Administration’s Indictment Threat

A joint letter signed by three former Federal Reserve chairs, Janet Yellen, Ben Bernanke, and Alan Greenspan, has condemned the Justice Department’s threat to indict Fed Chairman Jerome Powell as an “unprecedented attempt” to undermine the independence of the US central bank. The letter was released on Monday, following reports that the department had issued subpoenas to the Fed last week.

The letter stated that the reported criminal inquiry into Powell is a form of prosecutorial attack aimed at undermining the Fed’s independence. It likened this approach to the interference with central bank independence often seen in emerging market countries with weak institutions.

US Senator Lisa Murkowski has expressed her support for Republican Thom Tillis’s plan to block President Donald Trump’s Fed nominees, citing concerns about the stability of markets and the broader economy if the Federal Reserve loses its independence. She stated that Congress should investigate the Justice Department if it believes probing the Fed was warranted over renovation cost overruns.

White House economic adviser Kevin Hassett has been seen as a potential pick to succeed Powell, who is set to step down in May. Hassett questioned Powell’s congressional testimony about the Fed’s new building construction, which is at the centre of the Justice Department’s probe.

Trump has publicly pressured the Fed to cut interest rates, breaking with longstanding practice meant to insulate the central bank from political pressure. The President has stated that he believes the US should be rewarded for success, not brought down by it.

A group of 13 former top economic policymakers appointed by both Republican and Democratic presidents have condemned the Trump administration’s actions, stating that they have no place in the United States, whose greatest strength is the rule of law.

Source: Al Jazeera