Fed Changes Course and Takes On Trump

“Jerome Powell wanted to avoid a fight. That had long been his approach to handling President Trump and his relentless attacks on the Federal Reserve, which in his second term had taken on heightened intensity,” the New York Times reports.

“Between an executive order wresting more control over the Fed’s oversight of Wall Street to Mr. Trump’s attempt to oust a sitting member of the policy-setting board of governors, the Fed had stuck to a time-tested strategy: Avoid provoking the president. At times, that meant bending to meet his demands in areas like climate change and bank regulation. But Mr. Powell, the Fed chair, drew the line when it came to protecting the central bank’s autonomy to set interest rates.”

“A criminal investigation into whether Mr. Powell lied to Congress… has prompted the central bank to cast aside that approach and instead fight, the outcome of which could determine whether the Fed remains an independent entity.”

Washington Post: Former Fed chiefs rebuke Justice Department probe into Fed chair.