Chair of the Federal Reserve says DOJ subpoenas threaten Fed’s independence

On Friday the Chair of the Federal Reserve said the Department of Justice served the Federal Reserve with grand jury subpoenas that threaten a criminal indictment linked to his testimony before the Senate Banking Committee last June. "This unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure," the Chair of the Federal Reserve said.

The chair said the June testimony included discussion of a multiyear project to renovate historic Federal Reserve office buildings, but he argued the subpoenas are not about that testimony or the renovation project. "Those are pretexts," the Chair of the Federal Reserve said, and he asserted the action is instead a response to the Federal Reserve setting interest rates based on the Fed’s assessment of economic conditions rather than following presidential preferences.

The statement framed the subpoenas as a test of the Fed’s ability to set monetary policy independently. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead monetary policy will be directed by political pressure or intimidation," the Chair of the Federal Reserve said.

The chair also affirmed respect for the rule of law and accountability, saying "No one, certainly not the chair of the Federal Reserve, is above the law." He noted his years of service under four administrations and said he has carried out his duties "without political fear or favor" while focusing on the Fed’s dual mandate of price stability and maximum employment.

The recorded statement in the transcript contains no response from the Department of Justice, members of Congress, or other government officials. The Chair of the Federal Reserve concluded by pledging to continue "to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people."