Richard Fisher on DOJ Investigation into Federal Reserve Independence

DOJ Investigation and Fed Independence

• 🎯 Richard Fisher, former Dallas Fed President, expresses concern over the DOJ's investigation into the Federal Reserve, stating there is no independence to the Justice Department.
• ⚠️ He believes this action may backfire on the Trump administration, citing opposition from former Treasury Secretaries, Fed chairs, and key senators and House members.
• 💡 Fisher rejects the notion that the President had no involvement, suggesting the investigation is a bald attempt to take control of the Federal Reserve.

Powell's Response and Market Reaction

• ⚡ The former Fed President acknowledges that Fed Chair Powell's public and pointed response to the attacks is unprecedented, but notes that the attacks themselves are also unprecedented.
• 📈 Market indicators like gold and silver prices rising suggest nervousness and a market shaken by the events.
• 📌 Fisher believes Jerome Powell currently has the upper hand and that attempts to influence him to leave his post may have only strengthened his resolve.

Preserving Federal Reserve Autonomy

• 🔑 Preserving Federal Reserve independence is crucial, even though mistakes are made, such as accepting the argument of transitory inflation.
• 🏛️ Fisher argues that political control over the Fed is worse than its occasional errors, and this situation appears to be an attempt to scare Powell away from his governor's seat.
• 🤝 He believes Powell has the support of the FOMC, which will elect the chair for the next year.

Political Motivations and Future Implications

• 🧠 Fisher understands the political appeal of attacking the Fed, especially with weakening support from the base, but states it doesn't make sense from the standpoint of Federal Reserve independence.
• 📉 The actions undermine the authority of potential future Fed chairs, making it difficult for them to operate independently based on data rather than presidential desires.
• 🇺🇸 The historical instinct in the United States has been to protect the Fed's independence, and Fisher hopes the President will back away from this course of action.