Tensions between Federal Reserve Chair Jerome Powell and President Donald Trump have reached an unprecedented level, marking a serious moment for the independence of the US central bank. The conflict escalated after the Justice Department served subpoenas to Powell, raising the extraordinary possibility of a criminal investigation into a sitting Fed chair.
For years, Powell had avoided direct confrontation with Trump, despite repeated personal attacks and threats of dismissal from the former president. Powell consistently maintained that his role was non-political and focused solely on the Federal Reserve’s mandate of promoting maximum employment and controlling inflation. He believed that engaging in political disputes would distract from the Fed’s core mission.
However, the subpoenas forced Powell to break his long-standing silence. In a rare and forceful response, he framed the issue not as a personal matter but as a broader attack on the Federal Reserve’s independence. Powell warned that threatening criminal charges over interest rate decisions risks undermining the institution’s ability to act in the public interest. He stated that monetary policy must be guided by economic data and evidence, not political pressure or intimidation from the White House.
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