Jamie Dimon: Probe of Fed's Powell Could Backfire

JPMorgan Chase CEO Jamie Dimon warned that a Trump administration investigation into the Federal Reserve could "increase inflation expectations and probably increase rates over time."

Dimon, one of Wall Street's most influential voices, delivered the warning Tuesday as JPMorgan released fourth-quarter results, pushing back against what he described as growing political pressure on the central bank.

He said he has "enormous respect" for Federal Reserve Chair Jerome Powell and remains a strong supporter of the Fed's independence.

"Anything [that] chips away at that is probably not a great idea," Dimon told reporters on a call, the Financial Times reported.

"And in my view, it will have the reverse consequence. It will raise inflation expectations and probably increase rates over time."

Dimon spoke in defense of the Fed two days after Powell disclosed he was served with grand jury subpoenas tied to testimony he gave before Congress about the estimated $2.5 billion renovation of the Fed's Washington headquarters.

Dimon said political interference would run counter to President Donald Trump's stated goal of bringing rates down, because markets could respond by demanding higher yields if they fear the Fed is being bullied.

"I want to say that I don't agree with everything the Fed has done," Dimon said, according to The Wall Street Journal.

"I do have enormous respect for Jay Powell the man."

Politico reported Dimon's remarks are part of a widening backlash among top financial executives as the administration faces criticism over a Justice Department push to open a criminal inquiry tied to Powell's congressional testimony.

BNY Mellon CEO Robin Vince also warned that undermining Fed independence could rattle the bond market, the foundation of U.S. borrowing and the global financial system, and end up pushing interest rates higher.

The Financial Times reported global central bank leaders also issued a statement backing Powell and warning that central bank independence is critical to price and financial stability.

Former Fed chairs and other top economic officials have likewise criticized the investigation as a dangerous precedent.

Trump has repeatedly criticized Powell over interest rates, and the Fed's pricey headquarters renovation has become a flashpoint in that long-running fight.

The administration has argued it is pursuing accountability — a message that resonates with many Americans who see powerful institutions in Washington operating without meaningful oversight.

But Dimon and other market leaders are effectively warning that even justified scrutiny can have unintended consequences if investors interpret it as political intimidation.

In that case, the market's reaction — higher long-term rates and higher inflation expectations — could hit working families first through pricier mortgages, auto loans, and business credit.

Even as he raised alarms about Fed independence, Dimon struck an upbeat tone on the economy, the Financial Times reported, saying the U.S. has remained resilient.

Still, his message to Washington was blunt: When politicians and prosecutors tangle with the central bank, the "reverse consequence" may be more inflation pressure and higher borrowing costs.

• Jeanine Pirro: Fed Ignored DOJ Outreach
• The Powell Testimony at the Center of the Fed Probe