Jerome Powell Investigation: A Deeper Threat to US Fed's Independence and Stability

• Jerome Powell's unscheduled statement confirms a criminal investigation into his congressional testimony, signaling institutional stress.
• The investigation, triggered by alleged inconsistencies regarding the Fed's $2.5 billion headquarters renovation, is seen as a political attack on the Fed's independence.
• President Trump has consistently pressured the Fed for lower interest rates, despite a strong US economy, and has attempted to influence its decision-making.
• The probe threatens the Fed's credibility, could increase US borrowing costs, complicates Powell's succession, and impacts banking regulation and dollar stability.
• This episode highlights the erosion of institutional norms, instrumentalization of legal processes, and a shift towards personalized economic governance in the US.

Why It Matters: The criminal investigation into Jerome Powell signals a critical threat to the US Fed's independence and institutional integrity.