On Monday, Federal Reserve Chair Jerome Powell delivered a stark warning.
Responding to the Justice Department’s subpoena and threat of charges, Powell said the move was a pretext: an attempt to pressure the central bank into setting interest rates according to political demands rather than economic evidence. He framed it as an unprecedented attack on Federal Reserve independence and vowed to continue doing his job “without fear or favor.”
Powell is right about the dangers of politicizing economics. But here’s the uncomfortable truth: the Federal Reserve is far from a pristine institution devoted to “public service,” as Powell claims.
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