Governments can weaponize criminal‑justice tools to pressure independent monetary authorities to change policy (e.g., threatening investigations or prosecutions to induce rate cuts). Using the Department of Justice or comparable prosecutorial instruments in this way converts legal process into macroeconomic lever‑pulling and undermines central‑bank independence.
— If normalized, this tactic would degrade monetary credibility, raise inflation and financial‑stability risks, and make macro policy contingent on personal political cycles rather than on technocratic judgement.
Noah Smith
2026.01.13
100% relevant
Jerome Powell’s on‑the‑record statement that the DOJ threatened criminal charges tied to Fed activities — paired with reporting of White House backchannels seeking rate cuts — directly exemplifies this practice.
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