Transcript
Rob Armstrong (0:00)
Foreign.
Katie Martin (0:09)
Here's Jerome Powell, chair of the Federal Reserve, speaking on Sunday night.
Jerome Powell (0:13)
On Friday, the Department of justice served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve, is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role. The Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. 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. Or whether instead monetary policy will be directed by political pressure or intimidation.
Katie Martin (1:25)
Oof. Mic drop. Hey, Rob. I mean, what on earth is going on here?
Rob Armstrong (1:31)
It tells you something that everyone was astonished by that speech because all that was was a man saying something we all know to be true, every single person knows to be true. And it tells you something about the dialogue around our political system. That this is, you know, somebody just speaking plainly about what is obviously true is a mic drop moment.
Katie Martin (1:56)
And that thing that is true is the independence of the Federal Reserve. The US Central bank, the world's most important financial institution, is in jeopardy. This is unhedged, the Markets and Finance podcast from the Financial Times and Pushkin. I'm Katie Martin, a market columnist at the FT in London with plenty to write about. And I'm joined through the magic of technology all the way from New York City by that guy, the slightly stunned Rob Armstrong off of the Unhedged newsletter. Rob, central bankers normally talk in code very, very politely. This was not that was it.
Rob Armstrong (2:34)
This was really remarkable. And for me it was an extremely heartening moment because it was kind of non hysterical, concise and absolute all at the same time. And I just thought it was great. And you know, he did with that plain speaking. He allowed a lot of good things to happen. I think he gave cover for Republican politicians to say, okay, now you've gone too far, Mr. President. And I think he allowed markets to kind of breathe out and realize maybe there is a line here on central bank independence that won't be Crossed.