In a remarkable show of institutional solidarity, three former Federal Reserve chairs have joined forces with seven other economic policy leaders to condemn what they characterize as an unprecedented Justice Department investigation targeting current Fed Chair Jerome Powell.
The coalition—which includes former Treasury Secretaries Janet Yellen, Lawrence Summers, Tim Geithner, and Jacob Lew alongside ex-Fed chairs Ben Bernanke and Alan Greenspan—issued a forceful statement on Monday decrying the criminal probe as a direct threat to central bank independence.
‘This investigation represents an extraordinary departure from established norms,’ the signatories declared. ‘The Federal Reserve’s operational autonomy and the public’s perception of that independence remain fundamental pillars of American economic stability.’
The unusual intervention came just one day after Powell revealed in an unscheduled video statement that federal prosecutors had served subpoenas and threatened criminal indictment over his congressional testimony regarding Federal Reserve facility renovations. Powell characterized the investigation as ‘unprecedented’ and suggested it stemmed from President Trump’s persistent dissatisfaction with interest rate policy.
‘The Justice Department’s actions must be viewed within the broader context of sustained administrative pressure on the Fed,’ Powell asserted, referencing Trump’s very public campaign for lower interest rates to reduce government borrowing costs and stimulate lending.
Notably, the signatories span both political parties, having been appointed by Democratic and Republican administrations alike. Their statement emphasized that such investigative tactics against a sitting Fed chair ‘have no place in the United States, whose greatest strength is the rule of law’ and warned that similar practices in emerging economies ‘produce highly negative consequences for inflation and broader economic functioning.’
The White House has distanced itself from the probe, with President Trump claiming he didn’t ‘know anything’ about the investigation. Legal analysts suggest any attempt to remove Powell would trigger immediate market turbulence and complex litigation regarding the limits of presidential authority over the central bank.