In a sharp rebuke, US President Donald Trump has hit back at JPMorgan CEO Jamie Dimon for suggesting that the President is undermining the independence of the Federal Reserve. Trump defended his campaign against Fed Chair Jerome Powell, whom he appointed in 2018, saying “I think it’s fine what I’m doing. And we have a bad Fed person.”
Dimon had earlier warned that “anything [that] chips away at that is probably not a great idea, and in my view, will have the reverse consequence. It’ll raise inflation expectations and probably increase [interest] rates over time.” The chief executive of the Bank of New York Mellon, Robin Vince, also cautioned that there would be consequences to threatening the Fed’s independence, stating that “Independent central banks with the ability to independently set monetary policy in the long-term interests of the nation is a pretty well-established thing that we’ve seen all around the world over a very long period of time.”
Trump’s comments come as the Fed chair, Jerome Powell, faces a criminal investigation by the US Department of Justice over alleged “abuse of taxpayer dollars” linked to renovations at the central bank’s headquarters in Washington. Powell has suggested the allegations are baseless and merely a punishment for not cutting interest rates as fast as Trump would like.
The tensions between the Trump administration and the Federal Reserve have raised concerns about political interference in monetary policy. Central bankers and chief executives have started rallying around the Fed, with the New Zealand Foreign Minister Winston Peters rebuking the country’s central bank governor for signing a letter of support for Powell alongside nine counterparts, including the European Central Bank’s Christine Lagarde and the Bank of England’s Andrew Bailey.
As the battle between the White House and the Fed continues, the independence of the central bank remains a key concern for financial experts and policymakers alike.