JUDGE QUASHES SUBPOENAS AGAINST US FEDERAL RESERVE IN BLOW TO TRUMP

WASHINGTON, March 14 (Bernama-dpa) --  A United States (US) federal judge on Friday quashed subpoenas issued by the Department of Justice (DoJ) relating to an investigation into the current chair of the Federal Reserve, Jerome Powell, in a blow to the Trump administration, reported German Press Agency (dpa).

In January, the DoJ served subpoenas on the Fed in relation to allegations that Powell made false statements to the Senate in connection with a multi-year renovation of the central bank's headquarters.

Powell has dismissed the accusations as "pretexts," saying the issue was whether the Fed could continue to set interest rates based on facts and economic conditions, or whether monetary policy would instead be driven by political pressure or intimidation.

"A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning," Judge James Boasberg said in his decision to quash two subpoenas.

"On the other side of the scale, the Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual," the judge continued.

President Donald Trump has repeatedly attacked the central bank chief recently and has strongly demanded a cut in the key interest rate to boost the economy.

The Federal Reserve, which acts independently, had recently lowered it in several stages – but not enough for Trump.

Consequently, Trump regularly berated Powell and even spoke of sacking him.

No concrete attempt to dismiss Powell, whose term as the world's most important central banker is set to end in May, has materialised so far.

Trump in February said he had nominated former Fed governor Kevin Warsh for the post, saying that he understood the president's desire for a looser monetary policy.

The US Senate still needs to give its approval to the candidate.

Critics fear that the independence of the central bank could be compromised with Warsh at the helm.  

-- BERNAMA-dpa