Federal Reserve Chair Unusually Posts Video to Plead, U.S. Stock Futures Fall Simultaneously
Jerome Powell, the Chair of the U.S. Federal Reserve, is under investigation by federal prosecutors for allegedly giving false testimony to Congress regarding the remodeling of the Fed building. Powell claims the investigation is politically motivated in response to his refusal of President Donald Trump’s demand for interest rate cuts, and he vowed to uphold the independence of the central bank.
According to the New York Times and other outlets, Powell released a rare video statement, saying, “The Department of Justice issued a grand jury subpoena and threatened criminal charges concerning my testimony last June to the Senate Banking Committee.” The controversy surrounds a $2.5 billion remodeling project of the Federal Reserve’s headquarters in Washington, D.C., which allegedly involved exorbitant costs, including VIP elevators and premium marble. Powell had justified the remodeling in terms of safety issues like asbestos removal, but claims have surfaced that his testimony conflicted with official documents.
In his video, Powell stated, “The criminal charge threats are because the Fed set interest rates based on our best judgment for the public interest rather than following the president’s directions,” suggesting that the investigation is retaliatory for not reducing rates as Trump demanded. He emphasized dedication to his role, declaring he will not resign before his term ends on May 15.
U.S. media reports suggest that President Trump is behind this conflict, threatening the fundamental autonomy of the central bank. The NYT noted that Trump ally, U.S. Attorney Janine Pirro in Washington D.C., is spearheading the investigation, which has escalated to a confrontation between the White House and the Fed over interest rate policy. Bloomberg stated that this situation is causing a crisis of confidence in the U.S. financial system among global investors.
Following the news, U.S. stock index futures and the value of the dollar saw a sharp decline.