The BareStory
Federal Reserve Chair Jerome Powell has confirmed he is aware of an investigation by the U.S. attorney's office in Washington, D.C. The inquiry reportedly focuses on whether Powell provided false testimony to Congress last June regarding a renovation project at the Federal Reserve’s headquarters. While Powell acknowledged the matter, the Department of Justice has not officially confirmed the existence of the investigation.
Former Federal Reserve Chair and Treasury Secretary Janet Yellen strongly criticized the probe on Monday, labeling it "extremely chilling" and a threat to the central bank's independence. Yellen stated that the probability of Powell lying is "zero" and characterized the investigation as an effort to remove him from his position. She further expressed surprise that financial markets had not reacted with greater concern.
A group of other former senior officials, including former Fed Chairs Ben Bernanke and Alan Greenspan, as well as former Treasury Secretaries Timothy Geithner and Henry Paulson, issued a joint statement opposing the investigation. They described the inquiry as an "unprecedented attempt to use prosecutorial attacks to undermine" the Federal Reserve's independence, warning that such actions are typical of nations with weak institutions and could negatively impact the economy.
The investigation is reportedly being led by the office headed by Jeanine Pirro. The scrutiny comes amid reports that President Trump has pressured the Federal Reserve to lower interest rates to assist with financing the national debt.
How it may affect me
As a U.S. reader:
• Your retirement savings and investments could face increased volatility if financial markets react to the uncertainty surrounding the Federal Reserve's leadership, as suggested by Janet Yellen.
• You may see changes in borrowing costs for loans and mortgages if reported political pressure successfully forces the Federal Reserve to lower interest rates to finance the national debt.
• The broader stability of the national economy affecting your livelihood could be at risk if the investigation undermines the central bank's independence, as warned by former senior officials.
• You are witnessing a significant dispute over government accountability as investigators probe whether false testimony was provided to Congress regarding the use of funds for agency renovations.
