""This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. ... Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," he said. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions-or whether instead monetary policy will be directed by political pressure or intimidation.""
"Markets moved back into "Sell America" mode overnight as traders digested the prospect of an incoming Fed chair who lacks independent credibility: The dollar sank 0.32% against a basket of international currencies; the yield on 5-year Treasuries moved sharply up, a sign that investors now regard U.S. government bonds as being suddenly more risky; gold futures-the traditional safe haven-rose 2.21% today to hit a new record high over $4,600 per troy ounce; and S&P 500 futures are down 0.66% this morning prior to the opening bell."
Whoever replaces Jerome Powell as Federal Reserve chair faces the risk of criminal prosecution if the chair does not follow President Trump's preferences, creating a direct threat to central bank independence. An extraordinary statement vowed continued independent monetary policy despite federal grand jury subpoenas related to alleged renovation cost overruns, calling those subpoenas pretexts. The statement framed the issue as whether interest-rate decisions will be based on evidence and economic conditions or on political pressure and intimidation. Financial markets reacted violently: the dollar fell, five-year Treasury yields rose, gold hit a record above $4,600, and S&P 500 futures fell amid negative analyst commentary.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]