JP Morgan CEO Jamie Dimon criticized the Justice Department's investigation into Federal Reserve Chairman Jerome Powell, stating that the measure could undermine precisely what Donald Trump supposedly wants by pressuring the monetary authority: lowering interest rates.
In a teleconference with journalists this Tuesday, January 13th, regarding the release of the bank's fourth-quarter results, Dimon stated that "anything that undermines" the central bank's independence "is not a good idea."
“Everyone we know believes in the independence of the Fed,” Dimon said, according to Bloomberg . “Anything that erodes that is probably not a good idea. In my view, it will have the opposite effect: it will raise inflation expectations and likely increase interest rates over time.”
A leading voice in the U.S. financial system, Dimon has been defending Powell and the Fed against Trump's attempts at interference, both publicly and in private conversations with the president.
Dimon, who at other times praised tax cuts and deregulation promoted by the Trump administration, stated in July that "the Fed's independence is absolutely critical" and that "playing games with the Fed can have adverse consequences."
Although he defended the Fed from Trump's attacks, he admitted that he is not the biggest fan of the way Powell is conducting monetary policy. "I mean, I don't agree with everything the Fed has done," Dimon stated. "But I have enormous respect for Jerome Powell as a person."
Dimon joined other financial industry executives and regulators in criticizing the criminal investigation against Powell. Earlier, the presidents of 12 central banks from other countries signed a letter in support of the Fed chairman.
In the letter, they state that the independence of central banks is "a fundamental pillar of price, financial and economic stability, in the interest of the citizens we serve." Among the signatories is the president of the Central Bank (BC), Gabriel Galípolo .
Former Fed chairs, including Alan Greenspan, Ben Bernanke , and Janet Yellen , released a letter on Monday, January 12, expressing their support for Powell and calling the investigation an "unprecedented attempt" to undermine the Fed's independence.
The Fed and Powell have long been in Trump's crosshairs, who is dissatisfied with their handling of monetary policy. Since September, the Fed has cut interest rates by only 0.75 percentage points, to a range of 3.5% to 3.75%.
Powell is a frequent target of the American president, who has called him an "idiot" and "stubborn" for not accelerating interest rate cuts. The assessment is that Trump and his allies are seeking every possible pretext to undermine the Fed's independence. The renovation of the monetary authority's headquarters is the most recent example.
The project, which began in 2022, has an estimated cost of US$2.5 billion, about US$700 million over the original budget. Trump has used this increase to accuse Powell of mismanagement, even going so far as to personally visit the construction site, an unusual gesture for a president.
The opening of the inquiry led Powell to take a stand against the White House, something rare in the Fed's nearly 113-year history. In a video posted on Sunday, January 11, he said the investigation is part of Trump's campaign to push for decisions favorable to his policies.
"This is about whether the Fed will be able to continue setting interest rates based on evidence and economic conditions. Or whether, instead, monetary policy will be driven by political pressure or intimidation," he stated.
