President Donald Trump has criticized Federal Reserve chief Jerome Powell for not cutting interest rates as much and as quickly as the president wants.

cross-posted from: https://beehaw.org/post/24179103

Federal prosecutors have opened a criminal investigation of Federal Reserve Chairman Jerome Powell, he confirmed on Sunday evening.

Powell said the probe was the result of the Fed “setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of” President Donald Trump.

Terrible precedent that will harm our economy’s ability to recover from high unemployment or inflation.

Powell’s statement is worth a read

  • cyrano@piefed.socialEnglish
    33·
    1 day ago

    Powell’s first response suggests this is going to be gloves off - and the bond market should be worried. If China wanted to establish the renminbi as a replacement for the dollar as the world’s reserve currency they could not have found a better method than have the US President try and prosecute the head of the Fed.

    Official video statement by Powell https://www.youtube.com/watch?v=KckGHaBLSn4

    • Avid Amoeba@lemmy.ca
      17·
      1 day ago

      I don’t think they want RMB to become the world’s reserve currency. It’s got too many downsides for them. The destruction of the dollar’s domination is desirable for them and almost everyone but the US though.

      • StinkyFingerItchyBum@lemmy.caEnglish
        8·
        9 hours ago

        I disagree. A sizeable chunk of America’s financial might is being able to export their inflation thinly around the world yet retain the power of the defacto global reserve. So much of their power evaporates with a weak currency. China’s manufacturing dominance no longer solely based on an endless pool of cheap labour, but highly advanced automation can take a strong currency. Plus the relative hit to their only rival makes it highly desirable.

        Edit: This is a pivotal moment to step in with strength and market based openness and begin to usurp the US who are now burdened with being unreliable markets. They were broad, deep financial oceans. Now its treacherous shoals filled with pirates. Money will flee.

        Edit: But China has to develop their rule of law and predictability for markets and business to be considered reliable and predictable enough to gain business confidence.

        • Avid Amoeba@lemmy.ca
          21·
          23 hours ago

          Oh I didn’t quite mean that. Yes China wants dedollarization. As do we. Yes China isn’t successful because of cheap labour. China never really was getting the world’s manufacturing solely because of the cheap labour but even that stopped being true a long time ago. Still having a sovereign currency is helpful for internal economic management. If you become the world’s reserve currency, you lose some of that sovereignty. It also has implications on the ability to be a net exporter. That’s why I’m saying I don’t think they want 60% of the world’s reserves to be in RMB. It’s usage is increasing but I don’t think China wants it to ever get the exirbitant privilege status because of the cons that come with would be bad for their project, e.g. their prod self-sufficiency.