Picture courtesy of CBS News

Former heads of the US central bank have issued a strong rebuke of a criminal investigation into Federal Reserve Chair Jerome Powell, warning it threatens the Fed's independence. Janet Yellen, Ben Bernanke, and Alan Greenspan, along with 10 other former officials, condemned the probe, calling it a tactic more suited to emerging markets. They emphasised that such actions undermine the US's rule of law, which is crucial for economic stability.

The investigation, launched by the Department of Justice (DoJ), follows a year of criticism from US President Donald Trump, who has publicly attacked Powell over interest rate decisions. Trump, who criticised Powell's price cuts as inadequate, stated that he was unaware of the investigation's details. Powell revealed in a video statement that the probe concerns his testimony about Federal Reserve building renovations, labelling them "unprecedented."

Powell believes the inquiry is a result of his dissatisfaction with the Fed's pace of interest rate cuts, which he reduced three times in late 2025. Despite this, Trump has consistently advocated for more aggressive cuts. Powell argues the DoJ probe is part of broader administrative pressures, with backing from both Democratic- and Republican-appointed officials.

The White House, when asked about the Fed's independence, referred questions to the Justice Department. White House spokesperson Karoline Leavitt questioned Powell’s competence, deferring judgement on his legal standing to the DoJ. Meanwhile, former Fed Chair Yellen voiced her concerns, implying that the probe has political motivations.

Republican Senator Thom Tillis has expressed opposition to any new Fed nominees until the probe concludes, signalling a possible disruption in confirming Trump’s nomination as Powell’s replacement. Despite these political tensions, US stock markets remained stable, with only slight movements in financial stocks.

Some Republican lawmakers echoed concerns about the probe's implications on Fed operations. Representative French Hill described the investigation as a distraction that could impede monetary policy decisions. Senator Kevin Cramer criticised Powell but expressed doubts about the criminal allegations, reported the BBC.

Key Takeaways:

• Former Fed chairs united against the DoJ’s criminal probe into Powell.

• Trump’s criticisms and demands for rate cuts contribute to tensions.

• Stock market remains mostly stable amid political and economic uncertainties.

  

Adapted by ASEAN Now from BBC 2026-01-13

 

 

6 hours ago, webfact said:

The White House, when asked about the Fed's independence, referred questions to the Justice Department.

The Institutional Fallout goes as follows:

This "lack of knowledge" by Trump, Bessent calls it a mess, is a government working at cross-purposes:

The Treasury (Bessent) is trying to calm markets and manage a smooth transition.

The DOJ (Pirro - an ex biased Fox News reporter now a district attourny spearheading this) is issuing criminal subpoenas.

The President is claiming to be an observer while simultaneously insulting the target of the investigation on social media instead of acting like a leader to stop the banana republic comparisons.

This fragmentation is exactly what has led allies and investors to worry that the U.S. is losing its reputation for having a stable, predictable, and independent central bank. Its going to backfire and thanks to Pirro, Trumps next Fed chair is going to have to wait.

The slogans are for real :

End the Fed

Audit the Fed

Seems Trump is doing a little audit.

The Fed was never independant.

It is a very dangerous precedent when a president uses his power to go after people who he either perceives as being disobedient, disloyal or independent. This is the opposite of a democracy this borders on an autocracy run by a wannabe dictator.

I don't like you Powell, you didn't obey me when I asked you to lower rates, you've been very disobedient, you've shown a major lack of fealty to the new king, and you need to be dismissed.

As far as I'm concerned the best way to do that is to shame you, humiliate you, try to convict you on fake charges, and always do the wrong thing whenever possible.

My name is Don. I am a world class and humongous fool.

The Fed is, and always has been, an organisation which is beset with rumours of malfeasance. A genuinely independent audit would be no bad thing. However there will be enormous pressure against such a move by vested interests.

What independence when Trump appoints the next Fed chairman?

The senate needs to be proactive. Before Trump appoints Powell's successor, a solid majority of senators should send Trump a list of acceptable replacements. Tell him that if he chooses anyone outside they list, that person will be rejected. I don't think Trump can get a majority of senators to block such a move.

41 minutes ago, John Drake said:

The senate needs to be proactive. Before Trump appoints Powell's successor, a solid majority of senators should send Trump a list of acceptable replacements. Tell him that if he chooses anyone outside they list, that person will be rejected. I don't think Trump can get a majority of senators to block such a move.

Good points, but then again trump appointed Powell and didn't know that he had!!! Keep the clown away from the final decision.

10 hours ago, Thingamabob said:

The Fed is, and always has been, an organisation which is beset with rumours of malfeasance. A genuinely independent audit would be no bad thing. However there will be enormous pressure against such a move by vested interests.

The Trump Administration is and has been since the beginning an organization rife with rumors and proof of malfeasance. Every Cabinet member and the President should be locked up as soon as possible.

12 hours ago, spidermike007 said:

The Trump Administration is and has been since the beginning an organization rife with rumors and proof of malfeasance. Every Cabinet member and the President should be locked up as soon as possible.

Are you ok ?

28 minutes ago, Thingamabob said:

Are you ok ?

Are you lucid?anyway it’s not playing well here at all even the republicans are against it.Trump hasent the skill to govern or make deals for that matter it’s allways by intimidation or bullying for lack of a better term.it is what he is.

7 minutes ago, Tug said:

Are you lucid?anyway it’s not playing well here at all even the republicans are against it.Trump hasent the skill to govern or make deals for that matter it’s allways by intimidation or bullying for lack of a better term.it is what he is.

I don't agree. Anyway, it will be interesting to see how the situation in Iran works out. Meantime, bear in mind it was not Trump who invaded Iraq and Libya and ruined both countries, not was it him who allowed the shambolic withdrawal from Afghanistan leaving such a mess behind.

The only Federal employee that needs replacing is Donald J Trump. A lot of Americans are realizing this and

I hope they all vote accordingly when the time comes. I hear rumors that even a lot of Donny's supporters

no longer support him, is that true??

I hope so, for Americas sake.