Yellen directly blasts probe into Powell: “An unprecedented attack on the Fed’s independence”

[Financial News, New York City – Correspondent Lee Byung-chul] “This is an act that gravely undermines the independence of the central bank.”

Former Federal Reserve System (Fed) Chair Janet Yellen strongly criticized the criminal investigation targeting current Chair Jerome Hayden Powell.
On the 12th (local time), former Chair Yellen said, “This situation is extremely chilling,” adding, “I am actually surprised that markets are not more worried. It is clearly something they should be concerned about,” according to Consumer News and Business Channel (CNBC).
Her remarks came shortly after Jerome Hayden Powell revealed that he was aware the U.S. Attorney's Office for the District of Columbia was reviewing whether he gave false testimony to Congress regarding a $2.5 billion renovation project at the Fed’s headquarters last June.
Former Chair Yellen flatly rejected the very possibility that Jerome Hayden Powell might have lied. “As far as I know Jerome, the likelihood that he lied is zero,” she said. “I believe the reason they are targeting him is because they want his job and they want to push him out.”
Yellen served as Fed chair during the first year of President Donald Trump’s first term, but was replaced by Jerome Hayden Powell after her term ended. She later served as treasury secretary in the Joe Biden administration, becoming the first woman ever to have held both the Fed chair and treasury secretary posts.
Yellen was particularly critical of political pressure to use the Fed’s interest rates as a tool for managing the national debt. Former President Donald Trump has repeatedly argued that the Fed should cut rates to reduce the interest burden on the federal debt, which now stands at about $38.4 trillion.
On this point, Yellen said, “There is a president who says the Fed should cut interest rates in order to lower the interest burden on the federal debt,” and added, “I completely disagree with that. That is the road to becoming a banana republic.”
Meanwhile, former Fed Chairs Ben Bernanke and Alan Greenspan, along with former treasury secretaries Timothy Geithner and Henry Paulson, and numerous prominent economists, issued a joint statement describing the investigation as “an unprecedented attempt to use prosecutorial power to undermine the independence of the central bank.”
They stressed, “This is how monetary policy is decided in emerging economies with weak institutions, and it causes serious side effects for inflation and the functioning of the broader economy,” adding, “In the United States, where the rule of law is the foundation of economic success, such actions can never be tolerated.”

pride@fnnews.com Reporter Lee Byung-chul Reporter