The Director of the Federal Housing Finance Agency, Pulte, forwarded the following news last night: “Federal Reserve Chairman Powell has been referred to the Department of Justice for perjury related to the $2.5 billion 'renovation' project at the Federal Reserve building, facing criminal charges,” and stated, “This is true.” Previously, Fox News reported that U.S. House Representative Anna Paulina Luna filed criminal charges with the Department of Justice, claiming that Powell committed perjury twice. Subsequently, White House Press Secretary Levitt stated that Trump has no plans to fire Powell. U.S. Treasury Secretary Basent stated that the Federal Reserve's decision to proceed with major building renovations amidst operational losses should be scrutinized, and the Federal Reserve should “thoroughly review its entire mission” to enhance credibility. It now appears that the White House's strategy towards Federal Reserve Chairman Powell has clearly changed; Trump himself no longer claims he intends to fire Powell but emphasizes that he is incompetent and calls for immediate interest rate cuts. Instead, Republican lawmakers have stepped in to accuse Powell, thereby forcing his resignation. Whether Powell can withstand this wave of attacks from the Republicans remains to be seen. Deutsche Bank stated that if Powell is removed, it would severely impact the independence of the Federal Reserve, and U.S. 30-year Treasury yields could jump by 50 basis points. How the situation develops, let us wait and see.
