JP Morgan’s CEO, Jamie Dimon, has issued a caution against the Trump administration’s criticism of Federal Reserve Chair Jerome Powell, suggesting it could have unintended negative effects.

Speaking to reporters following the release of JP Morgan’s fourth-quarter earnings on Tuesday, Dimon stood in defense of the Federal Reserve.

“Everyone we know supports the independence of the Fed, and so do we. Undermining that is probably not a wise move,” Dimon remarked.

He further warned that such actions could have the opposite effect of their intent, potentially increasing inflation expectations and leading to higher interest rates over time.

Dimon, a leading figure in the banking sector, also commented, “While I don’t agree with all of the Fed’s actions, I hold Jay Powell in high regard as an individual.”

Dimon’s warning came as inflation pressures held steady in December, with consumer prices rising 2.7 percent in line with economists’ expectations. 

Inflation remains higher than the Fed’s 2 percent target as the central bank continues to battle ‘sticky’ price pressures fueled by tariffs and a resilient jobs market.

Donald Trump has demanded aggressive rate cuts to juice the economy, but the Fed has resisted, arguing that running a ‘hot’ economy could reignite inflation. 

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., during the America Business Forum in Miami, Florida, US, on Thursday, November 6

US President Donald Trump sings upon his arrival to deliver remarks on the economy at Mount Airy Casino Resort in Mount Pocono, Pennsylvania, on December 9

Powell accused Trump of using the threat of prosecution to pressure the Fed into lowering interest rates in an extraordinary video message on Sunday night. 

The Justice Department issued subpoenas on Friday over a $2.5 billion renovation of the Fed’s headquarters.

Trump claimed he had no knowledge of the DOJ’s investigation and administration officials, including Treasury Secretary Scott Bessent, were quick to distance themselves from the legal action. 

The Fed’s independence is considered sacrosanct because any political interference raises fears of reckless money-printing, spiraling inflation and currency collapse. 

Bessent called Trump late on Sunday to warn that the DOJ’s probe had ‘made a mess.’

‘The secretary isn’t happy, and he let the president know,’ a source familiar with Bessent’s late-night call said.

The market delivered a split verdict on Monday. Gold surged to a new record in a flight to safe-haven assets, Treasury yields ticked up amid inflation fears, while stocks bounced and the S&P500 notched a fresh all-time high amid the chaos.

Former Fed chair Janet Yellen, who served as Joe Biden’s Treasury Secretary, warned that the US was on ‘the road to a banana republic.’ 

Secretary of Treasury Scott Bessent speaks with President Trump at The White House Digital Assets Summit at the White House in Washington, DC, on March 7

Director of the Federal Housing Finance Agency Bill Pulte speaks with reporters at the White House, Friday

US Attorney Jeanine Pirro launched the investigation without informing the Treasury Department, sources told the Daily Mail.

The ex-Fox anchor ‘went rogue,’ an administration official claimed.

Pirro’s bold action comes as her boss, Attorney General Pam Bondi, has faced mounting criticism from Trump in recent weeks over what he sees as her failure to aggressively pursue his priorities, the Wall Street Journal reported Monday. 

But another official said Pirro would not have proceeded without a ‘signal that the president would be supportive.’

The signal, officials believe, was relayed last week at a meeting in Florida between Trump and Federal Housing Finance Agency Director Bill Pulte, who denied any involvement on Bloomberg TV on Monday. 

Bessent has history with Pulte.

The Treasury Secretary and the federal housing chief almost came to blows in a nightclub in September, according to Politico.

‘Why the f*** are you talking to the president about me? F*** you,’ Bessent reportedly told Pulte. ‘I’m gonna punch you in your f***ing face.’

Pulte, whom the Financial Times calls an ‘agent of chaos,’ has leveraged his massive social media following to bypass traditional political channels. 

He was the primary architect and public face of a 50-year mortgage proposal earlier this year which was ridiculed by critics.

Pulte confirmed to reporters on Friday that the policy had been canned.

U.S. Attorney for the District of Columbia Jeanine Pirro arrives to attend a New Year’s Eve party with U.S. President Donald Trump at his Mar-a-Lago Club in Palm Beach, Florida

Janet Yellen gives remarks at an event celebrating the Community Development Financial Institutions FUND (CDFI) at the U.S. Treasury Department on November 21, 2024 in Washington, DC 

U.S. President Donald Trump, Federal Reserve Chair Jerome Powell, and U.S. Senator Tim Scott (R-SC) tour the Federal Reserve Board building, which is currently undergoing renovations, in Washington, D.C., U.S., July 24

Former Fed chairs Yellen, Ben Bernanke and Alan Greenspan criticized the Trump administration for its investigation of Powell on Monday.  

Every living former Fed chair said in a joint statement that the investigation amounted to an ‘unprecedented attempt’ to undermine the central bank’s independence. 

Republican senators warned that interfering with the central bank could have serious economic consequences. 

Lisa Murkowski said the stakes were enormous for investors and households alike.

‘The stakes are too high to look the other way: if the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer,’ Murkowski wrote on X.

Another senior Republican, Thom Tillis, said the probe removed any doubt that the administration was trying to exert control over the central bank. 

‘If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,’ Tillis said.