Powell is fighting against Trump's Fed plans.

Powell Resists Trump's Interference with the Fed

Federal Reserve Chairman Jerome Powell is defending himself against the pressures from the White House regarding the central bank. As the Trump administration plans to appoint a new Fed chair, the political pressure on Powell has intensified. However, Powell is standing firm against Trump’s efforts to gain greater control over the Fed.

Powell’s Statements and Political Pressures

Powell indicated that Trump has been exerting sector-specific pressures based on his testimony to Congress last summer, stating that this is merely an extreme reaction to political pressure. In recent statements, he said, “On Friday, the Department of Justice served subpoenas to the Fed from a grand jury. This action should be evaluated in the context of the administration's threats in pursuit of lower interest rates and greater authority.”

Trump and the White House's Reactions

In an interview with NBC News, Trump claimed he was not aware of the Justice Department's actions, but criticized Powell’s performance. White House Press Secretary Karoline Leavitt argued that the president did not issue the inquiry order but defended the right to criticize the central bank. White House spokesperson Kush Desai expressed that the current administration is determined to make the U.S. economy more dynamic.

Market Impacts

Economists indicate that the criminal investigation conducted by the Justice Department could negatively affect consumers' financial situations. Moody’s chief economist Mark Zandi emphasized that this could bring significant drawbacks for investors and that assaults on the Fed’s independence could mean higher interest rates and uncertainties in the future.

Experts' Opinions

Brett House, an economics professor at Columbia Business School, emphasized that threats to the Fed's independence could seriously affect consumers' financial situations. Experts predict that Trump’s attempts to control the Fed with political influences may initially lower interest rates, but could have serious negative consequences in the long run. This situation could weaken consumers’ purchasing power.

Conclusion

In light of all these developments, Powell's continued resistance to Trump's plans highlights efforts to maintain the Fed's independence. However, the effects of this struggle on the markets hold the potential to bring negative outcomes for both investors and consumers.