Federal Reserve Chair Jerome Powell Faces DOJ Probe Amid Independence Concerns
In a move that has sparked debate over the independence of the Federal Reserve, U.S. Treasury Secretary Scott Bessent has defended the Department of Justice's investigation into Fed Chair Jerome Powell. The probe, which has raised concerns about potential interference in monetary policy decisions, is centered around Powell's testimony regarding a project to renovate several Federal Reserve office buildings in Washington, D.C.Bessent Defends DOJ Probe
In an interview with CBS Saturday Morning co-host Kelly O'Grady, Bessent emphasized that 'independence does not mean no accountability.' He argued that the Fed must be 'beyond reproach' in its dealings and characterized it as the 'most powerful, unappointed group in the U.S.' This stance is a departure from Powell's assertion that the probe is part of a campaign to pressure central bank officials into more aggressively cutting interest rates.
Concerns Over Cost Overruns
The investigation centers around Powell's June 2025 testimony before a Senate committee regarding the renovation project. Trump officials have highlighted the project's mounting costs, with some estimates suggesting that it could reach $1.5 billion. Bessent noted that if the Treasury Department wanted to renovate an office building, it would need to secure funding through an appropriation, whereas the Fed can simply 'print magic money.'
Powell's Response
Powell has openly rejected Trump administration claims of cost overruns in renovating the Fed buildings. He castigated the Justice Department probe as part of a campaign to pressure central bank officials into more aggressively cutting interest rates. This development has sparked concerns about potential interference in monetary policy decisions and the independence of the Federal Reserve.
The investigation into Powell's testimony has raised important questions about the balance between accountability and independence at the Federal Reserve. As the probe continues, it remains to be seen how this will impact monetary policy decisions and the Fed's ability to operate independently. One thing is clear: the debate over the Fed's independence is far from over.
