Title: Inflation Stays Steady Amidst DOJ Probe into Powell – A Test of Fed’s Independence? The Federal Reserve has been facing scrutiny lately due to the ongoing Department of Justice (DOJ) probe into its Chair, Jerome Powell. This investigation brings into question the independence and capacity of the central bank in managing price increases effectively. Inflation remained steady at 2.7% in December compared to a year earlier, according to U.S. Bureau of Labor Statistics data released on Tuesday. Although this is the lowest level since July, it still remains nearly a percentage point higher than the Fed’s target rate of 2%. The probe into Powell comes at an interesting time as inflation continues to test the Federal Reserve’s ability to manage prices amidst sluggish hiring and elevated inflation. The central bank is tasked with maintaining price stability while maximizing employment, a dual mandate that has become increasingly challenging in recent months. To address these pressures, the Fed primarily relies on its single tool: interest rates. In an effort to boost the labor market, the Federal Reserve cut interest rates at three consecutive meetings late last year. However, this move risks fueling demand and exacerbating inflation. Historically, central banks that lack independence tend to favor lower interest rates as a means of short-term economic stimulus. This approach can lead to years of unchecked consumer demand driven by low interest rates, which in turn could result in prolonged periods of high inflation. The DOJ probe into Powell appears to center on allegations related to the Fed’s independence and its potential impact on monetary policy decisions. As we await further details about this investigation, it is crucial for policymakers and economists alike to consider how these developments may affect not only the Federal Reserve but also other central banks around the world. In conclusion, the ongoing DOJ probe into Powell highlights the importance of maintaining the independence of central banks in order to effectively manage inflation and maintain economic stability. As we navigate through this uncertain period, it is essential that policymakers carefully consider their actions and prioritize long-term growth over short-term gains.
Source: [Original Article](https://abcnews.go.com/Business/inflation-expected-held-firm-posing-challenge-amid-doj/story?id=129127426)
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