US Court Quashes Subpoena Against Fed Chair Powell

A U.S. federal judge has quashed a subpoena issued by the Department of Justice against Federal Reserve Chairman Jerome Powell. The ruling is seen as a significant blow to the U.S. government's ongoing investigation, according to publicly released court documents. In his ruling, U.S. District Judge James Boasberg stated that evidence suggested the U.S. government was using the subpoena to exert political pressure. He stated, "There is substantial evidence that the government issued these subpoenas to coerce Powell into lowering interest rates or resigning." The judge also emphasized that there was little evidence of criminal wrongdoing by Powell, calling the government's justifications "weak and unsubstantiated."

The decision is being viewed as a major setback for U.S. President Donald Trump, who has been critical of Powell for failing to lower interest rates. He has long expressed dissatisfaction with Powell and requested the Department of Justice investigate the Fed chair. The investigation also highlights the pressure exerted on the Federal Reserve by the Trump administration, with the Fed viewed as a politically independent institution. Trump has harshly criticized Powell on social media. Simultaneously, his administration has filed a lawsuit with the U.S. Supreme Court seeking the removal of Lisa Cook, a Biden appointee to the Fed's Board of Governors.

Powell has long avoided responding to the criticisms. However, in a video released days after he received the subpoena in early January, he called the investigation an attack on the Fed's independence. Powell's term as Fed Chairman is set to end in May.