Outside the Box
When politicians get involved with central-bank decisions, inflation, the dollar and the stock market all become less predictable
Last Updated:
First Published:
The Federal Reserve was served grand-jury subpoenas by the U.S. Justice Department that threaten a criminal indictment. While serious, it’s unlikely that the Trump administration’s effort to control the Fed will ultimately succeed. The move appears aimed at pressuring Fed Chair Jerome Powell to step down from his board seat once his term as chair ends in May, even though his separate term as a Fed governor runs until January 2028.
Markets have reacted in a muted fashion so far — an indication that investors believe the administration’s initiative will fail to gain momentum. The U.S. Senate, along with the bond market, represents a key institutional constraint.
