Yellen: Probe into Powell 'gravely threatening' to Fed independence… 'markets should be concerned'

Former Federal Reserve Chair Janet Yellen strongly criticized the investigation into Fed Chair Jerome Powell, calling it "an extremely chilling matter for the Fed’s independence."

In an interview with CNBC, Yellen said, "This is the road to a banana republic," adding, "I think markets should be much more seriously concerned about this." She noted that the probe appears not to be aimed at assessing Powell’s integrity or policy judgment, but rather an attempt to force him out of office for political motives.

She went on to stress that "central bank independence is a key pillar of financial-market and economic stability," warning that this kind of pressure targeting the Fed chair could set a highly dangerous precedent.

Earlier, former Fed chairs appointed by both Democratic and Republican administrations, along with former Treasury secretaries and former chairs of the White House Council of Economic Advisers (CEA), also issued a joint statement backing Powell and describing the probe as an unprecedented attack on the Fed’s independence.