Federal Reserve Jerome Powell released a statement saying that the Federal Reserve has received a grand jury subpoena by the Department of Justice over his testimony to Congress about ongoing renovations at the Federal Reserve. However, Federal Reserve Chairman Jerome Powell said that the subpoena was primarily caused as part of President Donald Trump’s pressure on the Federal Reserve to lower interest rates.
Chairman Powell reiterated that the Fed has always strived to set rates according to data and economic conditions and this is part of the government’s pressure on the Federal Reserve to lower interest rates. President Trump has been pressuring Chairman Powell to lower interest rates in the attempt to create better economic conditions and lower mortgage rates. Interest rates however can only be set by the Federal Reserve which enjoys full autonomy and independence thanks to the Federal Reserve Act of 1913 and the Banking Act of 1935.
A grand-jury subpoena is part of an ongoing investigation and it could lead to an indictment.
President Trump has been using the Federal Reserve’s ongoing renovations as a pretense to put pressure on the Fed to lower rates. President Trump accused the Fed of over-spending and building an unnecessary basement next to the Potomac River.
The Federal Reserve’s base interest rate has been set at 3.5% last December and is higher than the ECB’s 2.4% rate in the Euro-area with inflation in Europe hovering at 2.1%. The latest CPI reading in the US was at 2.7%.
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