The Department of Justice is investigating Federal Reserve chair Jerome Powell over his Senate testimony about building renovations and has threatened criminal indictment, which Powell says is retaliation for the Fed setting interest rates independently rather than following Trump's preferences.

Former Fed chair Janet Yellen called the investigation “politically motivated” and said there is ”utterly no basis” for it, noting that Congress, not the White House, has oversight authority over Fed spending. Lawmakers from both parties and economists have criticized the probe as an attempt to weaken the Fed's independence.

Ryan Monarch, associate professor of economics, agrees with the interpretation of the probe as a “politically motivated attempt to put the conduct of monetary policy and interest rate setting into the realm of the President.”

“I also believe this is the most serious attempt to curtail the Fed's independence in modern Fed history,” he tells Newsweek.

In another Newsweek article, “Trump DOJ’s Move Against Jerome Powell Hits Stock Market,” Monarch says, “It is, of course, uncertain how markets will react. However, the type of ‘sell America’ market movements that we saw around Liberation Day, in which the dollar weakens and stocks fall over concern about the future of American economic policy, is likely if investors believe that Fed independence is at risk.”