By choosing to respond publicly to the Trump administration’s threats of criminal prosecution, Fed Chair Jerome Powell is positioning himself as a defender of the central bank’s independence ahead of key Supreme Court hearings and fiscal policy decisions.

Powell has generally refused to be drawn on past criticism. However, with this legal escalation, Powell released a statement on Jan. 11. Powell called the attacks “pretexts,” stating: “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”

This escalation of attacks against the Fed further into the legal arena may concern markets. That’s because the Trump administration’s attacks appear focused on weakening the independence of the Federal Reserve. This topic will receive further attention on Jan. 21, when the

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