Jamie Dimon warns Federal Reserve subpoena 'not a good idea'

• Dimon stated that actions chipping away at Fed independence will 'probably have reverse consequences' and 'raise inflation expectations'
• The DOJ investigation focuses on a $2.5 billion renovation project for the Marriner S. Eccles Federal Reserve Board Building and the 1951 Constitution Avenue Building
• Republican Senators including Thom Tillis and Lisa Murkowski have criticized the probe, with Murkowski warning that 'if the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer'

Summary

Key Development: JPMorgan Chase CEO Jamie Dimon warned that Justice Department grand jury subpoenas issued to the Federal Reserve could undermine central bank independence and potentially raise inflation expectations.

Main Figure: Dimon made these remarks Tuesday during JPMorgan's fourth-quarter earnings call, expressing support for Fed Chairman Jerome Powell while cautioning against actions that "chip away" at Fed independence.

Background: The investigation stems from Powell's June testimony before the Senate Banking Committee. The DOJ probe focuses on a multi-year, $2.5 billion renovation project involving two Federal Reserve office buildings—the Marriner S. Eccles Federal Reserve Board Building and the 1951 Constitution Avenue Building.

Powell's Response: In a Sunday video statement, Powell characterized the subpoenas as threatening and suggested they represent consequences for "setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president."

Political Reaction: Several Republican lawmakers, including Senators Thom Tillis (R-N.C.) and Lisa Murkowski (R-Alaska), have raised concerns about the investigation's potential impact on financial markets. Murkowski stated that if Fed independence is compromised, "the stability of our markets and the broader economy will suffer," adding that Congress should investigate the DOJ if project cost overruns—"which are not unusual"—are the basis for the probe.

Market Implications: The situation raises concerns about central bank autonomy, a cornerstone of monetary policy credibility that directly impacts inflation expectations and market stability.