Johnson responds to Powell investigation: Let the Department of Justice process "run its course," Federal Reserve independence faces a test

Speaker of the House Johnson on the 13th commented on Federal Reserve Chair Powell’s investigation, stating “If Powell is innocent, the truth will come out in the investigation,” and emphasized that the Department of Justice must continue to push forward with the investigation. This is the latest statement from top Republicans following the Trump administration’s initiation of a criminal probe into Powell, further highlighting the current political pressure faced by the Federal Reserve.

Political Confrontation Escalates, the Fed Faces Scrutiny

Clash of Multiple Positions

Johnson’s statement appears neutral but is actually an endorsement of the Department of Justice’s investigation. However, this stance has not been widely accepted. According to the latest reports, Powell has directly responded, calling the Trump administration’s investigation an “excuse” to influence interest rates. Notably, this incident has drawn condemnation from former Fed chairs and key members within the Republican Party affiliated with Trump, indicating significant disagreements even within the Republican ranks over the DOJ’s investigation into the Fed chair.

Direct Threat to Federal Reserve Independence

This is not just a political confrontation but also touches on the core of modern central banking—the independence of the Fed. The existence of Fed independence is to prevent interest rate policies from being hijacked by political factors. The Trump administration’s criminal investigation into Powell, on the surface a judicial process, essentially constitutes direct interference in Fed decision-making. Johnson’s use of neutral language like “let the process run its course” actually provides political support for such interference.

Market Response and Risk Assessment

Currently Showing Relative Calm

According to the latest reports, cryptocurrency prices are consolidating slightly, with US stocks opening lower but then recovering slightly, though overall trend remains weak. This indicates limited immediate market impact from the event, but this calm may be just the eye before the storm.

Potential Risks Cannot Be Ignored

If the DOJ’s investigation ultimately exerts substantial pressure on Powell or forces a change in policy stance, it could have profound effects on global financial markets. More critically, it could set a precedent for future political interference in central banks. For the crypto market, the uncertainty surrounding Fed policies is itself a significant variable; political interference will only amplify this uncertainty.

Follow-up Focus

From the current situation, this confrontation may continue for some time. Johnson’s statement suggests that top Republicans are unlikely to easily abandon the investigation. However, Powell’s firm pushback and internal party opposition indicate that the road ahead will not be smooth. Markets should closely monitor the progress of the DOJ investigation and whether the Fed will alter its policy approach under political pressure.

Summary

Johnson’s statement represents ongoing pressure from the Trump administration on the Federal Reserve, constituting a direct challenge to the central bank’s independence. While the market reaction is currently calm, the political implications of this event are far-reaching beyond short-term market effects. Whether the Fed can maintain independence under political pressure will directly influence the direction of U.S. monetary policy and, consequently, impact global financial markets, including the crypto sector. This is a long-term risk factor that warrants close attention.