Wall Street CEOs back Fed independence as Justice Department investigates Powell

Senior bank executives publicly urged protecting the Federal Reserve's independence after the Justice Department issued subpoenas related to an investigation involving Fed Chair Jerome Powell.

Top Wall Street bank leaders publicly defended the Federal Reserve's institutional independence on Jan. 13, following disclosure that the Justice Department had issued subpoenas to the Fed in an investigation involving Chair Jerome Powell. JPMorgan CEO Jamie Dimon and BNY CEO Robin Vince spoke on conference calls about risks from political interference. Fed officials and bankers warned that perceived erosion of independence could affect inflation expectations and market confidence. The administration has framed the probe as related to renovation spending, while Powell has described the subpoenas as a pretext for political influence. Key facts: - The Fed confirmed it had received subpoenas from the U.S. Justice Department in connection with an investigation involving Chair Jerome Powell. - JPMorgan CEO Jamie Dimon said executives believe in Fed independence and warned that undermining it could raise inflation expectations and push rates higher over time. - BNY CEO Robin Vince cautioned that weakening central-bank independence could unsettle the bond market and financial stability. - Powell's chair term runs through May, and he retains the right to remain on the Fed board until January 31, 2028; the probe was described publicly as focusing on the Fed building renovation. Summary: Senior banking executives emphasized the importance of Federal Reserve independence and warned of economic and market effects if that independence is eroded. Undetermined at this time.