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The skirmishing between U.S. President Donald Trump and the U.S. Federal Reserve has broken into outright war, with potentially huge implications for the independence of the world’s most important central bank, the U.S. dollar, and America’s financial credibility in the future.

On Friday, the U.S. Justice Department issued subpoenas to Federal Reserve Chair Jerome Powell, a Trump appointee who has spent much of his term under fire for not acquiescing to the president’s desire to turbocharge the economy through loose monetary policy. 

The skirmishing between U.S. President Donald Trump and the U.S. Federal Reserve has broken into outright war, with potentially huge implications for the independence of the world’s most important central bank, the U.S. dollar, and America’s financial credibility in the future.

On Friday, the U.S. Justice Department issued subpoenas to Federal Reserve Chair Jerome Powell, a Trump appointee who has spent much of his term under fire for not acquiescing to the president’s desire to turbocharge the economy through loose monetary policy. 

The criminal investigation has to do with Powell’s testimony to Congress last summer regarding oversight of the multibillion-dollar renovation of the Fed’s headquarters. 

However, Powell insists the investigation is yet another pressure tactic from Trump.

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said in an extraordinary weekend video message. “Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president. 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,” he........

© Foreign Policy