Not quite off the hook
The latest chapter in the Fed’s “why are we talking about office wallpaper?” saga is here: U.S. Attorney for the Washington, D.C. District Jeanine Pirro said Friday she would drop the probe into the central bank’s costly renovations.
That sounds like a tidy ending, but the bigger story is the one behind it. The Fed has become a political punching bag again, and every new swipe at its independence raises the same annoying market question: is monetary policy still being judged on inflation and jobs, or on whatever’s trending in Washington?
Why investors should care
For markets, Fed independence isn’t some ivory-tower philosophy debate. It’s the plumbing. If investors start to think the central bank is getting leaned on, you can get:
- more rate volatility
- noisier Treasury trading
- extra stomach acid for anyone holding duration
- a fresh excuse for traders to price in policy drama instead of policy data
The bigger picture
Dropping the probe may cool the immediate temperature, but it doesn’t erase the broader tension. The Fed’s still navigating a world where every speech, meeting, and whisper gets stress-tested against politics. And for investors, that means the “central bank is boring” era remains stubbornly out of reach.
Big picture: the renovation probe may be going away, but the larger fight over Fed independence is still very much alive.