Powell Under Fire: Fed's Alleged Political Pressure from Trump Administration

U.S. Federal Reserve Chair Jerome Powell alleges that the Trump administration threatened him with a criminal indictment over his Congressional testimony. Powell claims these threats are a pretext to pressure the Fed to lower interest rates, escalating tensions between Powell and former President Trump.

Jerome Powell, U.S. Federal Reserve Chair, revealed on Sunday that the Trump administration had threatened him with a criminal indictment tied to his Congressional testimony last summer. This move stems from an ongoing conflict over a Fed building renovation project which Powell termed a 'pretext' for exerting pressure on the central bank to lower interest rates.

The Department of Justice issued grand jury subpoenas to the Federal Reserve, intensifying the battle between Powell and Trump. 'I have a deep respect for the rule of law and accountability in our democracy. No one is above the law,' Powell stated, placing these actions within a broader context of the administration's desire for reduced interest rates.

The conflict has roots in Trump's demand for sharp interest rate cuts since taking office, blaming the Fed's policies for economic stagnation. He even considered firing Powell, despite legal protections. Powell accused the administration of using legal threats as a tool to manipulate Fed policy, highlighting the stark escalation in their fraught relationship.

(With inputs from agencies.)