On Sunday, Federal Reserve Chair Jerome Powell said the Department of Justice had threatened the central bank with “criminal indictment” over his testimony before Congress, relating to its building renovation costs.
These Are Just ‘Pretexts’
This marks a major escalation in tensions between President Donald Trump and the central bank, following months of relentless attacks for not cutting rates aggressively, and repeated calls for Powell’s removal, undermining the independence of the Federal Reserve.
In his statement, Powell said the Fed’s $2.5 billion headquarters renovation and the related grand jury subpoenas are merely “pretexts,” arguing that the real conflict centers on control of U.S. monetary policy.
“I have deep respect for the rule of law and for accountability in our democracy,” Powell said, adding that this “unprecedented action” should be viewed in the context of the administration’s growing threats and pressure in recent months.
Powell warned that the “threat of criminal charges” is simply a “consequence” of the Fed setting interest rates “based on our best assessment of what will serve the public,” rather than following the “preferences of the President.”
He said the confrontation ultimately centers on whether the Federal Reserve can continue making decisions “based on evidence and economic conditions,” or whether U.S. monetary policy will instead be shaped by “political pressure or intimidation.”
Powell concluded by saying that he has served under multiple administrations and remains committed to his role. “I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people,” he said.
Gold, Silver Futures Rally, Stocks Drop
The mounting threat to the Federal Reserve’s independence is driving investors toward hard assets, with gold and silver futures rallying in the wake of this development.
Gold futures for February delivery are up 1.95%, at $4,588.29 per ounce, while Silver futures for March delivery are up 5.14%, trading at $83.360 per ounce.
Meanwhile, stock futures are in the red, with Dow Jones futures down 0.44%, trading at 49,505, Nasdaq futures down 0.71%, at 25,755 points, and the S&P 500 down 0.47%, trading at 6,972
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