What happens if the Fed loses its independence?
Consider This from NPR
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🗓️ 13 January 2026
⏱️ 11 minutes
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Summary
The Trump Justice Department has subpoenaed the Federal Reserve for information related to its multibillion-dollar renovation of the Fed's headquarters in Washington.
The move comes on the heels of months of President Donald Trump trying to influence Federal Reserve Chairman Jerome Powell to lower interest rates.
And while he told NBC News he doesn’t know anything about the Department of Justice investigations, members of Congress, including some Republicans, say they’re concerned the independence of the Federal Reserve is now at risk.
The Federal Reserve decides monetary policy across the United States. Its decisions help shape the global economy. What happens if that independence is threatened? President Trump has been trying to influence Federal Reserve policy, since his first term.
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Transcript
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| 0:00.0 | Can you guess who President Trump is talking about here? |
| 0:03.2 | He's strong, he's committed, he's smart. |
| 0:07.2 | And if he is confirmed by the Senate, |
| 0:09.7 | Jay will put his considerable talents and experience to work, |
| 0:14.0 | leading our nation's independent central bank. |
| 0:16.8 | That is the president in 2017 praising Jerome Powell, |
| 0:20.8 | his nominee for Federal Reserve Chairman. |
| 0:23.3 | What does Trump say about Powell these days? Well, here he is last November at an investment event. |
| 0:27.9 | He's got some real mental problems. And now he's something wrong with him. |
| 0:32.4 | It's a little different. After their friendly start, the chairman and president had a rocky relationship during |
| 0:39.0 | Trump's first term. Things got worse as the COVID-19 pandemic wreaked havoc on the economy, |
| 0:45.1 | and inflation skyrocketed. In 2024, when Trump ran for re-election, he said he wouldn't |
| 0:51.2 | appoint Powell for another 10-year term. And things have only gotten worse since Trump was sworn in last January. |
| 0:58.0 | He's called Powell a political hack, among other things. |
| 1:01.2 | But we have a guy that's just a stubborn mule and a stupid person that is making a big mistake. |
| 1:08.0 | And the president has tried to strong arm Powell into drastically cutting interest |
| 1:12.2 | rates. Trump has also closely scrutinized building reservations the Fed authorized that went over |
| 1:17.4 | budget. The Fed is supposed to sit there and say where interest rates are going and a couple of other |
| 1:21.8 | very easy things to do. And he spent $2.5 billion. I think he's, you know, I think he's got some problems. |
| 1:29.7 | Through it all, Powell has stayed mostly measured and diplomatic. Take the summer when President Trump |
| 1:34.9 | toured federal reserve buildings being renovated and seemed to be building a case to fire Powell over those |
| 1:40.9 | renovations cost overruns. You're including the Martin renovation. |
... |
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