As the Justice Department investigates Federal Reserve Chairman Jerome Powell, CNBC’s Jim Cramer explained on Monday why he doesn’t think Powell should be prosecuted, adding that Wall Street doesn’t think the Justice Department will actually file charges.
“I don’t want to end up in a situation where the Fed director is actually prosecuted, because then the very concept of Fed independence and Justice Department independence would disappear,” he said.
Chairman Powell announced Sunday night that he is under criminal investigation in connection with the $2.5 billion renovation of the central bank’s headquarters. Powell said the investigation was a result of the Fed’s continued refusal to cut interest rates as rapidly as President Donald Trump has demanded. Powell said he would not bow to President Trump’s wishes, saying, “I will continue to do the job that the Senate approved me to do, with integrity and with a determination to serve the American people.”
Kramer stressed that Powell is not a criminal and does not deserve to go to prison. He said investors thought it was unlikely that Mr. Powell would be prosecuted because they thought it would be “insane” and “very bad for the stock price.”
He added that Wall Street also seems uninterested in the president’s new intervention in the economy. President Trump last week proposed putting a 10% cap on the interest rates that credit card companies can charge customers. Cramer said the change would prevent millions of Americans from borrowing money and suggested a crash could occur if businesses had to stop lending.
But Wall Street isn’t concerned because the idea is “too far,” he said.
“The market doesn’t believe at all that Jay Powell will be indicted or that credit card companies will be hit with interest rate caps,” he said. “We believe the market is right.”
