WASHINGTON—The president of the nation’s largest bank has come to the defense of Federal Reserve Chairman Jay Powell in the wake of more attacks by President Trump and members of his administration.
JPMorgan Chase Chief Executive Jamie Dimon said the central bank’s independence as crucial.
“I think the independence of the Fed is absolutely critical,” Dimon told media members in a call following the bank’s earning announcement, according to the Wall Street Journal. “Playing around with the Fed can have adverse consequences, the absolute opposite of what you might be hoping for.”
Trump has threatened to fire Powell, and members of the administration have urge him to resign because the Fed has not moved to lower interest rates.
First to Step Up
The Journal noted that Dimon has become the first leader of a major U.S. financial institution to publicly address the administration’s broadsides against Powell.
“Many on Wall Street have privately worried that political pressure will undermine Fed’s credibility,” the Journal reported. “It is almost universally held on Wall Street that tampering with Fed independence could have outsize consequences for global capital flows, because it could affect U.S. Treasurys and the dollar, which underpin financial markets worldwide.”
Drawing Praise
Powell has drawn praise from lawmakers in Washington, fellow central bankers and business leaders for maintaining the Fed’s independence despite mounting pressures from Trump, the Journal report added.
It noted that Fed officials are concerned that unnecessary rate cuts could instead send up long-term interest rates in ways that generate economic or financial-market instability.
