Powell Probe: Economists & Business Leaders React
- Federal Reserve Chair Jerome Powell said late Sunday that the central bank had received grand jury subpoenas from the Department of Justice.
- "No one - certainly not the chair of the Federal Reserve - is above the law," Powell said.
- Prominent economists and business leaders are reacting as the news hit markets at the start of the trading week.
Federal Reserve Chair Jerome Powell said late Sunday that the central bank had received grand jury subpoenas from the Department of Justice. He described the move as a part of an effort to pressure the central bank on monetary policy.
“No one – certainly not the chair of the Federal Reserve – is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the governance’s threats and ongoing pressure.”
Prominent economists and business leaders are reacting as the news hit markets at the start of the trading week. They have weighed in on the unprecedented DOJ move and how it affects the Fed’s independence, with some suggesting it could ultimately undermine the Fed’s credibility.
Here’s what leaders in economics, business, and politics are saying:
Sen.Thom Tillis
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On Sunday, the North Carolina Republican said he would oppose nominees for the Fed.
“If there were any remaining doubt about whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve,there should now be none,” Tillis said in a statement.
Mohamed El-erian
LinkedIn cofounder Reid Hoffman raised concerns about the Fed’s independence.
“Question to all those who said Trump would be better for the economy: is attacking the Fed’s independence what you had in mind?” wrote the prominent Democratic donor on X.
Peter Schiff
Peter Schiff, the chief economist at Euro Pacific Asset Management, attributed the gold price surge to fresh record highs on Sunday evening to the examination into Powell.
“I am not a fan of Powell, but I agree with him on Trump’s motivation,” Schiff, whose firm managed $1.4 billion last year, wrote on X.
In April, Schiff said Trump’s next Fed Chair pick would be a “loyal soldier.”
Michael A. Gayed
Michael A. Gayed, a renowned investment manager, said direct action against a sitting Fed Chair is “without modern precedent,” in an edition of his Lead-Lag substack report published on Sunday evening.
the inquiry into Powell raises questions about whether the long-standing boundaries between fiscal power, prosecutorial authority, and monetary independence are beginning to blur, Gayed said. The concern was less about any single case and more about the future precedent it may establish.
“Should investors conclude that future Fed officials could face legal consequences for policy decisions that conflict with political priorities, the incentive structure governing monetary policy could change,” said Gayed.
That shift could increase inflation risk premiums and weaken confidence in long-duration financial assets tied to stable policy expectations, he added.
Anthony scaramucci, a prominent investor and political commentator, criticised the Justice Department’s subpoenas in a post on X.
“So future potential fed chairs just remember if you don’t do what Trump wants he will criminally prosecute you,” he said.
Scaramucci served as White House communications director for eleven days during the first Trump administration but has since become a vocal critic of the former president.