The Justice Department’s criminal investigation of Federal Reserve chair Jerome Powell may, at first glance, feel far removed from consumers’ finances — but it could have far-reaching impacts on their wallets, according to economists.
“There’s nothing but downside here for investors and consumers,” said Mark Zandi, chief economist at Moody’s.
The primary concern is the erosion of the independence of the Federal Reserve, the U.S. central bank, from political influence, Zandi and other experts say.
If the public were to lose faith in longstanding Fed independence, economists CNBC spoke with say consumers would likely see the U.S. economy sour amid higher inflation and higher long-term interest rates on mortgages and other loans.
Investors would also likely see more stock market volatility and lower values for stocks, bonds and other assets, they say.
