For at least a year, since before the start of his second term, US President Donald Trump has been pressuring Federal Reserve Chair Jerome Powell to resign, citing his refusal to significantly lower interest rates.
While Powell's four-year term ends in May, Trump has nevertheless ramped up pressure on him to resign by announcing an investigation into the Fed chief earlier this month over plans to renovate two Federal Reserve buildings.
To the surprise of some, including Trump, who has asked how Powell became head of the US central bank, it was the president himself who appointed him in November 2017.
"I was surprised he was appointed," Trump said over the summer at a meeting in the Oval Office. Possibly recalling that he had appointed Powell, Trump added that he was surprised that former President Joe Biden had reappointed him.
What is Trump's goal?
Trump has repeatedly said he wants the Fed to lower interest rates to boost the economy, and has referred to Powell as "stupid" for not doing so.
There has been speculation that Trump is urging lower interest rates to offset economic damage caused by his tariffs and wants to spur economic growth ahead of the 2026 midterm elections, when the Democrats are expected to make significant gains.
Though setting lower interest rates could indeed give the economy a short-term boost, with more people being able to afford mortgages, some worry that it could trigger inflation or "overheat" the economy if done without careful consideration.
Why is the Federal Reserve's independence important?
To set interest rates, the Federal Reserve uses a combination of tools, including economic data, surveys and financial markets.
According to the Fed's website, it operates independently as a matter of policy.
Traditionally, the independence of central banks around the world has been considered essential for economic stability and credibility. Support for central bank independence has risen during economic downturns or uncertainty, such as wars or periods of high inflation.
This independence generally extends to protecting central bank officials from politically motivated dismissal and to controlling their own budget (within specific standard parameters).
According to the Federal Reserve website, "Though it specifies the goals for monetary policy, Congress has also provided the Federal Reserve operational independence. This flexibility ensures that monetary policy decisions can be directed toward the longer term, be based on data and objective analysis, and best serve the interests of all Americans."
"At the same time, the Federal Reserve is accountable to Congress and the American people for its actions. It achieves accountability by being transparent about its policy deliberations and actions through a range of official communications," it continued.
Questions over building renovations
Earlier this month, the Justice Department launched a criminal investigation into Powell.
Trump has repeatedly pointed to a $2.5 billion renovation of two historic Federal Reserve buildings, the Marriner S. Eccles Building, built in 1937, and the Constitution Building, built in 1961 (up from an earlier estimate of $1.9 billion). Supporters of the renovation note that the buildings have not had significant upgrades since they were built.
The US president's complaint over the renovation costs has been brewing for several months, while he pursues his own high-budget projects, including a new White House ballroom, estimated at $800 million and efforts to acquire Greenland, estimated at $700 billion.
How is Powell responding?
Ever since Trump began threatening him, the Fed chair has consistently said he will remain in his position until his term ends in May.
Following the subpoena, Powell recorded a video message, emphasising his determination to stay in his position and explaining his reasoning.
"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings," said Powell in the video.
"Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the President," he continued.
"Public service sometimes requires standing firm in the face of threats," he emphasised.
What are other bankers saying?
Central bank leaders from around the world are publicly expressing their support for Powell. Twelve central bank chiefs issued a joint statement in support of Powell and the central bank's independence.
"We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell," the statement reads.
"The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve," the statement continues.
"It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability."
In the US, Jamie Dimon, CEO of JPMorgan Chase, has expressed his support for Powell, saying that anything that chips away at the Fed's independence is not a good idea. Other Wall Street leaders have expressed similar concerns.