"Powell quickly responded with a press release asserting the investigation is less about financial misconduct and more about political influence of Fed policy-making: "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," accusing the Administration of attempting to influence Fed interest rate policy (i.e., demanding the Fed lower interest rates more, and more often)."
"Federal prosecutors from the Department of Justice appear to be seeking a grand jury indictment of the Federal Reserve and its Chairman Jerome Powell. The Vanguard S&P 500 ETF ( NYSEMKT: VOO) opened 0.5% lower on the news. On Sunday, the DOJ announced an investigation into the Fed's $2.5 billion project to renovate its office buildings in Washington, D.C., implying the funds may have been misused. CNN notes that the renovations include "removing asbestos and upgrading electrical and ventilation systems.""
"And speaking of interest rates, President Trump is also calling for banks to cap interest rates on credit card debt at 10% for one year. On the surface, this sounds reasonable. But banks set interest rates to cover their risk of loss. If they cannot charge enough to cover their risk, they're likely to risk less - which is to say, they'll lend less. That could turn into a drag on the economy - yet another reason for investors to feel pessimistic today."
Federal prosecutors from the Department of Justice are seeking a grand jury indictment of the Federal Reserve and Chairman Jerome Powell tied to a $2.5 billion renovation project for Fed office buildings in Washington, D.C., with allegations of possible misuse of funds. The Vanguard S&P 500 ETF opened 0.5% lower on the news. Powell characterized the investigation as politically motivated, saying criminal charges stem from the Fed setting interest rates based on public service rather than presidential preferences. President Trump has threatened to fire Powell for not lowering rates enough and proposes a one-year 10% cap on credit-card interest, which could reduce bank lending and slow the economy.
Read at 24/7 Wall St.
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