How One Republican Senator Is Stymieing Trump's Attack on the Fed

"On Sunday evening, the Federal Reserve posted a video of Chairman Jay Powell speaking directly to the camera about how the Justice Department had launched a criminal investigation into the Fed. While superficially related to excessive Federal Reserve building renovation costs, Powell said, "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.""

"The administration is trying to spook Powell into cutting rates deeper and, if he doesn't, ginning up cause to fire him. You don't want a central bank that makes interest rate decisions according to presidential demands. There's significant overlap between countries whose leaders meddle in their central banks' decisions and those that suffer hyperinflation. This is one of those bright red lines separating functioning countries-however barely, in the case of the good ol' U.S.-from the rest,"

"In a political system with a functioning brain, the threat of criminal charges against a technocrat for not juicing the economy to the president's liking would be enough to open an impeachment inquiry. In the United States political system circa 2025, we'll get a handful of statements from Republicans offering meaningful pushback. Fortunately, one of those Republicans has real power in this situation."

The Justice Department opened a criminal investigation into the Federal Reserve, prompting Chairman Powell to publicly warn that charges are being used because the Fed followed public-interest rate decisions rather than the president's preferences. The administration appears to be attempting to intimidate Powell into deeper rate cuts or to manufacture grounds for his removal. Central-bank independence is crucial to preventing political interference that can lead to hyperinflation and economic instability. The move prompted alarm from former Treasury secretaries and Fed chairs. In the current U.S. political landscape, only limited Republican pushback is expected, though one powerful Republican may act.

Read at Slate Magazine