A judge in the United States has stopped the Justice Department from investigating the Federal Reserve. This decision is a win for the Fed chairman, Jerome Powell.
Prosecutor Jeanine Pirro started the investigation and asked the Federal Reserve to provide documents about expensive renovations at its offices. But the judge, James Boasberg, said Pirro did not show any proof that Powell or the Federal Reserve had done anything illegal. Because of this, he blocked the subpoenas that were asking the Fed to provide information.
Powell had earlier said that the investigation was not really about the renovation costs. He believed it was actually an attempt to pressure the Federal Reserve to lower interest rates. The judge said the investigation may have been intended to pressure Jerome Powell to lower interest rates or step down so someone else could replace him. Know More
The judge also said the government showed almost no evidence that Powell committed a crime. Because of that, he concluded that the investigation did not have a proper legal reason. Pirro strongly disagreed with the decision. She said the ruling was wrong and claimed the judge had weakened her ability to investigate possible crimes. She called the decision outrageous and said she plans to appeal it.
Pirro is an ally of Donald Trump, who appointed her last year as a US attorney. The situation has raised concerns that politicians may be pressuring the Federal Reserve, which should work independently from the government. Powell’s term as chairman ends in May. Trump has already chosen Kevin Warsh as his pick to replace him. However, some politicians say the investigation should be resolved first before a new chairman is confirmed. Read More
One senator, Thom Tillis, said appealing the decision would only delay the appointment and added that the investigation appears weak and unnecessary. He said it looks like an attack on the independence of the Federal Reserve. When reporters asked Jeanine Pirro whether her appeal could delay the appointment of the new Fed chairman, she said she does not care about the political consequences and is only focusing on the legal case.
