The Justice Department’s criminal inquiry into Federal Reserve Chairman Jerome Powell could prompt the central bank to circle the wagons to protect its independence.
On Sunday, Powell revealed the DOJ served the Fed with grand jury subpoenas, threatening an indictment over his testimony before the Senate last June related to renovations on the headquarters building.
If his unusually forceful response blasting the probe is any indication, Powell isn’t going down without a fight, and he could even continue overseeing interest rates—even if President Donald Trump installs a new chairman who will do his bidding.
That’s because Powell actually wears two hats: He is chair of the Fed’s Board of Governors and chair of the Federal Open Market Committee.
Historically, the board chair has also been FOMC chair, but it doesn’t have to be that way. In fact, the Fed even alludes to it in its own explainer on how the central bank works.
