Fed Independence Crisis: Powell Counterattacks as Wall Street Warns of 'Backfire'

NEW YORK/WASHINGTON – The simmering tension between President Trump and Federal Reserve Chairman Jerome Powell has erupted into open conflict. As reports surface of a Department of Justice (DOJ) criminal probe into the Fed Chair, Wall Street leaders are voicing alarm regarding institutional independence.

Key Data Snapshot

• Fed Chair Term: Powell intends to stay through 2028 end date.
• JPMorgan Performance: Reported 2025 daily profit average of $156 million.
• Policy Risk: Proposed credit card rate caps at 10%.

Powell Breaks Silence

Chairman Powell released a video statement rejecting the administration's pressure, asserting that the Fed sets rates based on public interest rather than political preference. Sources indicate he is prepared to serve his full term ending in 2028 to block a successor appointed by Trump.

Legislative support has emerged from Senate Republicans, with Senators Thom Tillis and Lisa Murkowski vowing to block nominees until investigations are dropped.

Jamie Dimon Warns of Backfire

JPMorgan Chase CEO Jamie Dimon utilized his earnings call to criticize administrative interference. Dimon argued that political meddling would likely raise inflation expectations and increase rates over time.

Additionally, CFO Jeremy Barnum signaled strong opposition to the mooted 10% credit card rate cap, describing the policy as disastrous for credit availability.

Market Implications

• Detailed analysis suggests a new “Institutional Risk” premium for the Dollar in Forex markets.
• Despite soft economic data like CPI, fears of White House weaponization of the DOJ may drive long-term bond yields higher.