Trump hits back at JP Morgan CEO’s defence of Federal Reserve | Federal Reserve
Donald Trump has lashed out at JP Morgan boss Jamie Dimon, saying the Wall Street executive was wrong to suggest he was undermining the independence of the Federal Reserve.
The US president and his administration have come under fire for their attacks on Fed chairman Jerome Powell, who is facing a criminal investigation by the US Department of Justice for alleged “misuse of taxpayer dollars” in connection with renovations at the central bank’s headquarters in Washington.
Powell suggested the allegations were false and were merely punishment for not lowering interest rates as quickly as Trump wanted. Central bankers and top executives have since begun to rally around the Fed, raising concerns about political interference in monetary policy.
But Trump defended his campaign against Powell on Tuesday, saying: “I think what I did was good. And we have a bad Fed employee on our hands.”
When asked about Dimon’s comments, which warned against undermining the Fed’s independence, Trump said: “I think he’s wrong.
“We should be lower [interest] rates. “Jamie Dimon probably wants higher rates, maybe he makes more money that way.”
Trump also said during a factory tour in Michigan on Tuesday that he would continue with plans to announce the replacement of Powell, whom he appointed in 2018, in the “next few weeks.”
This came hours after Dimon told reporters he has “tremendous respect” for Powell, adding: “Everyone we know believes in the independence of the Fed.
“And anything [that] Overdoing this is probably not a good idea, and in my opinion it will have adverse consequences. Inflation will raise expectations and will likely rise [interest] Rates over time.”
Robin Vince, president of Bank of New York Mellon, also warned that threatening the Fed’s independence would have consequences.
“The fact that independent central banks have the ability to independently set monetary policy in the long-term interest 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 on Tuesday, according to Reuters.
“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 Fed’s independence.”
It emerged overnight that Powell had written to US senators last July with details of the Federal Reserve’s $2.5bn (£1.9bn) revamp project. As the Financial Times suggests This has complicated the Trump administration’s claims that the central bank boss misled Congress about the scale of the renovations.
