Top Wall Street executives have voiced strong support for the independence of the U.S. Federal Reserve, following the Trump administration’s opening of a criminal investigation into Fed Chair Jerome Powell. Jamie Dimon, CEO of JPMorgan Chase, and Robin Vince, CEO of BNY, both cautioned against actions that could undermine the Fed’s autonomy, echoing concerns raised by former Fed chiefs and key Republican figures. JPMorgan Chase is a global financial services firm that provides investment banking, asset management, and other financial services. BNY, or Bank of New York Mellon, is a global investments company that provides a range of financial services for institutions, corporations, and high-net-worth individuals.
Dimon emphasised the critical importance of Fed independence, stating that any perceived erosion could have the reverse effect of raising inflation expectations and increasing interest rates. He dismissed the administration’s actions as ‘not a great idea,’ reinforcing his stance from the previous year. Vince echoed these sentiments, warning against shaking the foundation of the bond market and potentially causing interest rates to rise due to a lack of confidence in the Fed’s independence.
The concerns arise after Powell revealed that the Fed had received subpoenas from the U.S. Justice Department, which he described as a ‘pretext’ to exert presidential influence over interest rates. The formal investigation reportedly concerns the renovation of the Fed’s headquarters. Central bankers fear that political influence over the Fed would undermine its commitment to its inflation target, potentially leading to higher inflation and instability in global financial markets.
Jeremy Barnum, JPMorgan’s finance chief, highlighted the potential for steeper yield curves and broader damage to American economic prospects and global economic stability if Fed independence is compromised. The situation unfolds as Trump has repeatedly criticised the Fed’s policies and considered firing Powell, despite protections intended to shield the Fed chair from removal. Powell’s term as chair ends in May, but he can remain on the Fed board until January 2028.
