Here's what leading voices in economics and business are commenting regarding the DOJ's investigation into the Fed

Justice Department Subpoenas Target Federal Reserve, Stirring Widespread Debate

Federal Reserve Chair Jerome Powell revealed that the central bank has been served with grand jury subpoenas from the Department of Justice, a move that has sent shockwaves through the financial and political communities.

Economists, business executives, and analysts are actively discussing the potential consequences of this unprecedented development, with many expressing concern over its impact on the Fed's autonomy.

All three living former Federal Reserve chairs have joined together to publicly denounce the Justice Department's actions.

Powell Responds to DOJ Subpoenas

On Sunday evening, Jerome Powell confirmed that the Federal Reserve had received subpoenas from the DOJ, describing the situation as an attempt to exert political pressure on the central bank's monetary policy decisions. Powell emphasized, "No one, including the Fed Chair, is above the law. However, this extraordinary step must be viewed in light of the administration's ongoing threats and pressure."

The news broke as markets opened for the week, prompting swift reactions from leading figures in economics and business. Many voiced concerns that the DOJ's actions could erode the Fed's credibility and independence.

Unified Criticism from Former Economic Leaders

On Monday, thirteen prominent American economic leaders released a joint statement condemning the Justice Department's investigation. The signatories, including all three living former Fed chairs, stressed that the central bank's independence is vital for economic stability. They warned that using criminal investigations as a tool to undermine the Fed sets a dangerous precedent, likening it to practices seen in countries with weaker institutions and warning of potential inflationary consequences.

They asserted, "Such actions have no place in a nation where the rule of law is fundamental to economic prosperity."

• Signatories included Alan Greenspan, Ben Bernanke, Janet Yellen, and five former Treasury Secretaries: Janet Yellen, Robert Rubin, Henry Paulson, Timothy Geithner, and Jacob Lew.
• Eight former chairs of the Council of Economic Advisers and a former IMF chief economist also endorsed the statement.

Background and Additional Reactions

Together, these economic leaders have served under eight different U.S. presidents, dating back to Gerald Ford.

Janet Yellen

Janet Yellen, who served as Fed Chair from 2014 to 2018 and is now Treasury Secretary, described the DOJ's investigation as "deeply chilling" and warned it threatens the central bank's independence, according to CNBC. She defended Powell, stating, "Knowing him well, I am certain he would not lie. This appears to be an effort to remove him from his position." Yellen also expressed surprise that markets were not reacting more strongly to the news.

Senator Thom Tillis

Senator Thom Tillis of North Carolina announced his intention to oppose any new Fed nominees, stating, "There should no longer be any doubt that Trump administration advisers are working to end the Federal Reserve's independence."

Senator Lisa Murkowski

Senator Lisa Murkowski of Alaska, after speaking with Powell, called the DOJ's investigation "an act of coercion." She argued that if the probe is based on project cost overruns, Congress should instead investigate the Justice Department. Murkowski supported blocking Fed chair nominees from the Trump administration.

Representative French Hill

Rep. French Hill of Arkansas, who chairs the House Financial Services Committee, described Powell as a person of integrity and said the criminal investigation is an unnecessary distraction.

Mohamed El-Erian

Mohamed El-Erian, a leading economist, previously called for Powell's resignation to protect the Fed's independence. He commented on X that the investigation could further damage the central bank's credibility, warning of deeper institutional risks.

Lloyd Blankfein

Former Goldman Sachs CEO Lloyd Blankfein likened the situation to a "murder-suicide," arguing that criminally targeting the Fed's independence is detrimental to both the institution and the Justice Department.

Reid Hoffman

Reid Hoffman, cofounder of LinkedIn, questioned whether undermining the Fed's independence aligns with claims that Trump would benefit the economy.

Peter Schiff

Peter Schiff, chief economist at Euro Pacific Asset Management, attributed a surge in gold prices to the Powell investigation. He agreed with Powell's assessment of Trump's motives and previously predicted that Trump's next Fed chair pick would be a "loyal soldier."

Michael A. Gayed

Investment manager Michael A. Gayed described the DOJ's actions as unprecedented in modern times. He warned that blurring the lines between fiscal, legal, and monetary authorities could set a troubling precedent, potentially altering incentives for future Fed officials and increasing inflation risks.

Victoria Greene

Victoria Greene, chief investment officer at G Squared Private Wealth, advised clients to remain calm and avoid overreacting to headlines, suggesting that the situation could present buying opportunities. She emphasized the importance of monitoring Fed independence, particularly regarding bond yields.

Jim Reid

Jim Reid, global head of macro research at Deutsche Bank, noted that Powell views the DOJ's move as an attempt to influence the Fed's independence, calling the situation "remarkable" and predicting more headlines in the days ahead.

Anthony Scaramucci

Anthony Scaramucci, founder of Skybridge and former White House communications director, criticized the subpoenas, warning that future Fed chairs could face prosecution if they defy presidential wishes. Scaramucci, once part of the Trump administration, is now a vocal critic of the president.

Jan Hatzius

Jan Hatzius, chief economist at Goldman Sachs, told Reuters that the subpoenas would likely intensify concerns about the Fed's independence. However, he expressed confidence that Powell would continue to base decisions on economic data rather than political pressure.

Lawrence H. White

Lawrence H. White, economics professor at George Mason University, remarked on X that the current turmoil has led him, a frequent critic of central banking, to support Powell in this instance.

Sharmin Mossavar-Rahmani

Sharmin Mossavar-Rahmani, chief investment officer at Goldman Sachs Wealth Management, downplayed concerns about Fed independence, stating that the Supreme Court would likely affirm the president's lack of authority to remove Fed officials. She emphasized the Fed's unique role and independence, and doubted that Trump intended to disrupt monetary policy direction.

Russ Mould

Russ Mould, investment director at AJ Bell, suggested that the DOJ's investigation aligns with a broader strategy to stimulate economic growth and manage federal debt. He noted that Trump favors policies such as lower interest rates, reduced oil prices, a weaker dollar, lower taxes, and deregulation.