Jamie Dimon supports Fed Chair Powell during DOJ investigation: 'All of us trust in the independence of the Federal Reserve'

Wall Street Leaders Rally Behind Fed Chair Powell Amid DOJ Probe

JPMorgan Chase CEO Jamie Dimon has voiced his backing for Federal Reserve Chair Jerome Powell, emphasizing the critical need for the US central bank to remain independent. Dimon's remarks came after Powell revealed that the Department of Justice had launched a criminal investigation related to his congressional testimony last year.

“Although I don’t agree with every decision the Fed has made, I have tremendous admiration for Jay Powell as a person,” Dimon stated during a press call following JPMorgan’s fourth-quarter earnings release.

He continued, “Everyone I know values the Fed’s autonomy. Undermining that independence is likely to have negative consequences, potentially increasing inflation expectations instead of lowering them.”

Dimon, along with other prominent Wall Street executives, previously defended the Fed’s independence when reports emerged last summer that the Trump administration was considering removing Powell from his position. At that time, Dimon stressed that an autonomous central bank is essential for both Powell and any future Fed leaders.

Dimon is among a growing number of influential figures supporting Powell. On Monday, three former Fed chairs and four previous Treasury secretaries released a strong statement expressing their solidarity with Powell.

The statement, signed by Janet Yellen, Ben Bernanke, Alan Greenspan, and four former Treasury secretaries from both major parties, described the DOJ’s investigation as an extraordinary attempt to weaken the Fed’s independence through legal intimidation.

“Such actions are characteristic of countries with fragile institutions, not the United States, where the rule of law underpins our economic prosperity,” the statement asserted.

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The Importance of Central Bank Independence

Many investors and economists agree that a central bank free from political interference is essential for keeping inflation in check and maintaining a stable US economy.

Robin Vince, CEO of Bank of New York Mellon, echoed Dimon’s concerns about threats to the Fed’s independence during a call with reporters. “The independence of the Fed is a foundational element of the US bond market,” Vince remarked.

He warned that questioning this principle could have the unintended effect of driving interest rates higher.

Potential Economic Consequences

Wilmer Stith, senior bond portfolio manager at Wilmington Trust, cautioned that rising bond yields could make borrowing more expensive for consumers, especially those seeking mortgages. This trend could undermine the Trump administration’s housing initiatives, including recent large-scale purchases of mortgage bonds by Fannie Mae and Freddie Mac.

Stith commented, “President Trump is undermining his own efforts to lower mortgage rates and help first-time buyers afford homes.”

Others have warned that using criminal investigations as leverage against the Fed could make it even harder for future Fed chairs to convince markets and the public of the central bank’s independence, complicating efforts to manage inflation expectations.

Former Goldman Sachs CEO Lloyd Blankfein wrote on X, “Trying to destroy the Fed’s independence through criminal probes is damaging for both the institution and the Justice Department. It feels like a lose-lose scenario.”

JPMorgan CFO Jeremy Barnum added, “The prevailing market view is that eroding the Fed’s independence typically results in steeper yield curves and harms the economy’s momentum.”

Barnum also noted, “Many experts with far more experience than I have weighed in on this issue.”

David Hollerith reports on the financial industry, covering everything from major banks to regional lenders, private equity, and the crypto sector.