[BOCA RATON] US Federal Reserve Vice Chair Philip Jefferson, responding to the Department of Justice subpoena of Fed Chair Jerome Powell, said on Friday he considered Powell to be “of the highest integrity.”
“I have great respect for the chair,” Jefferson said in comments to reporters after an economics conference at Florida Atlantic University, noting that Powell’s response to the DOJ threats of a criminal indictment “is there for everyone to read.”
Powell in a video on Sunday disclosed the DOJ had subpoenaed the Fed and threatened him with criminal charges over testimony he made last summer to a Senate committee about a Fed building renovation projection.
He called the department’s actions a “pretext” for President Donald Trump’s ongoing efforts to pressure the Fed for lower interest rates.
Jefferson’s comments were just the latest in an upwelling of public support for Powell both from other US policymakers and globally, including from Republican members of Congress who have threatened to hold up any Trump appointments to the Fed in response.
Powell’s term as chair ends in May. Trump is due to name a replacement soon but the nominee would need Senate confirmation to take office.
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The department’s actions have also put focus on the Fed’s ability to set monetary policy independent of political influence.
Jefferson said he regarded that as central to the economy achieving its potential.
“Countries that have independent central banks also have better economic outcomes,” Jefferson said. “I think that is something that is foundational.”
Federal Reserve Bank of Boston President Susan Collins said Friday it was right for Congress to set the central bank up to act independently.
Congress created “a central bank that, while accountable, has the independence required to make the tough calls that may be unpopular in the short term, but are best able to deliver price stability and maximum employment over the long term,” Collins said at a conference in Foxborough, Massachusetts. REUTERS
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