Wall St CEOs back US Fed independence amid Powell probe
The CEOs of leading Wall Street banks JPMorgan Chase and BNY voiced their support for the independence of the Federal Reserve, just days after the Trump administration launched a criminal investigation into Federal Reserve Chairman Jerome Powell.
The administration’s investigation into Powell this week drew condemnation from former Fed chairmen and criticism from key members of the Republican Party.
“Everyone we know believes in the independence of the Fed,” JPMorgan CEO Jamie Dimon told reporters.
“This is probably not a great idea and, in my view, will have the opposite consequence of increasing inflation expectations and possibly increasing rates over time.”
Dimon, one of corporate America’s most influential figures, said the Fed’s independence is “absolutely critical” in 2025.
Bank of America CEO Brian Moynihan told CNBC that an independent Fed provides an anchor for economic success in the United States.
“If you think about the U.S. economy, you think about the strength of this country, you think about us leading the world in all dimensions. One important piece of that is having an independent Fed that will set interest rate policies based on what it sees,” he said.
“An independent Fed provides a fulcrum of success that I think we all believe in in this country, and you see that … as the markets reflect that,” Moynihan said.
BNY CEO Robin Vince also warned Tuesday of the negative consequences of the erosion of the Fed’s independence.
“The fact that independent central banks have the ability to independently set monetary policy in the long-term interests of the nation is something that’s pretty well established that we’ve seen around the world for a very long time,” Vince told reporters during a phone interview.
“Let’s not shake the foundation of the bond market and let’s not do something that could somehow cause interest rates to rise because of a lack of confidence in the independence of the Fed,” Vince said.
Powell said late Sunday that the Fed was receiving subpoenas from the U.S. Justice Department and that it was an “excuse” to gain presidential influence over interest rates. The US administration’s criminal investigation is officially related to the renovation of the Fed headquarters.
Central bankers worry that political influence over the Fed will undermine confidence in the bank’s commitment to its inflation target, risking higher inflation and fueling volatility in global financial markets.
“The loss of the Fed’s independence tends to lead to steeper yield curves and other damage to ongoing economic dynamism,” said Jeremy Barnum, JPMorgan’s chief financial officer.
“The bigger question is the damage to America’s economic prospects and, frankly, to global economic stability.”
Trump has demanded the Fed lower interest rates since he takes office again in 2025; has accused his policies of holding back the economy and has publicly considered firing Powell despite legal protections that ostensibly prevent the Fed chairman from being removed from office.
While Powell’s term as chairman ends in May, he has the right to remain on the Fed board until Jan. 31, 2028, denying the president another Fed appointment by the end of his term, which would be Trump’s fourth appointment to the seven-member board.
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