Judge quashes DOJ subpoena seeking Fulton County election worker info

(NEW YORK) — The Federal Reserve is weathering a political “stress test” that threatens to undermine public trust in the central bank and damage the United States economy, former Fed Chair Jerome Powell said in recent remarks.

“Like many other institutions, the Fed has been undergoing a stress test,” Powell told an audience at the John F. Kennedy Library Foundation in Boston on Sunday, adding that “Congress wisely chose to insulate monetary policy decisions from political pressure. All other advanced-economy nations have done the same.”

The remarks amounted to a spirited defense of Fed independence, coming just weeks after Powell stepped down from his role as head of the central bank. Powell remains on the Federal Reserve’s 12-person board of governors.

At the outset of this year, the Department of Justice opened a criminal investigation into Powell centered on his testimony to Congress about the cost overruns in a building renovation. It was the first criminal probe of a Fed chair in the central bank’s 113-year history.

Powell denied any wrongdoing and condemned the investigation as an effort to influence Fed policy. President Donald Trump, who has repeatedly criticized Powell’s approach to interest-rate policy, denied any involvement in the criminal investigation.

The Supreme Court, meanwhile, is set to issue a decision in the coming weeks in a high-stakes legal fight focused on Trump’s attempted ouster of Fed Governor Lisa Cook over alleged mortgage fraud.

Federal law allows the president to remove a member of the Fed board “for cause,” but little precedent exists for such a removal. Cook rejected the charges as baseless, calling them politically motivated.

In his recent remarks, Powell defended legal protections for Fed officials as critical safeguards for the nation’s economy.

“If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well. The public would lose faith that the central bank will make decisions based on only what’s best for all Americans. The Fed’s credibility would be lost,” Powell said.

“That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses,” Powell added.

The warning comes as the Fed weathers a renewed bout of inflation set off by a historic oil shock amid the Iran war. The conditions offer an initial test for Fed Chair Kevin Warsh, who took the helm of the central bank last month.

If the Fed were to lose its independence, central bankers beholden to political leaders may favor lower interest rates as a means of boosting short-term economic activity and galvanizing public support, some analysts previously told ABC News. But, they added, that posture poses a major risk in the possibility of years-long inflation fueled by a rise in consumer demand, untethered by interest rates.

A burst of high inflation in the 1970s and 1980s offers a cautionary tale.

Before inflation took hold, President Richard Nixon had urged then-Fed Chair Arthur Burns to cut rates in the run-up to the 1972 presidential election. Nixon’s advocacy is widely viewed as contributing to lower-than-necessary interest rates that allowed inflation to get out of control.

Nearly a decade later, in 1981, the Fed raised interest rates as high as 20% in order to bring inflation under control. While the move succeeded in cooling off price hikes, it plunged the U.S. into a recession and sent the unemployment rate to 10%.

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(BURBANK, Calif.) — A man is in custody for allegedly stabbing a woman to death and stabbing and wounding her daughter, according to authorities in Los Angeles County, California.

Officers responded around 6 a.m. Monday, to a house in Burbank where they found two women suffering from stab wounds, Burbank police said.

The mother, 59-year-old Arti Varma, who taught first-grade in Burbank, died at the hospital, police said.

Her 25-year-old daughter was hospitalized in stable condition, police said. Authorities did not release the daughter’s name, but a neighbor identified her as Meera Varma, a nationally recognized mental health activist, according to Los Angeles ABC station KABC.

Detectives identified 30-year-old Sergio Fraire as a person of interest, and on Monday night, officers served a search warrant at a Burbank home where he was believed to be staying, police said.

Fraire was apprehended and arrested for murder and attempted murder, police said.

“The relationship, if any, between the suspect and the victims remains under investigation, as does the motive,” police said in a statement on Tuesday.

Authorities noted that “evidence related to the crime was recovered,” but they did not elaborate on the potential evidence.

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(NEW YORK) — Frank Carone, a former chief of staff to ex-New York Mayor Eric Adams, was arrested on Wednesday morning along with his brother Anthony and two others as part of a federal bribery case, sources familiar with the case told ABC News.

Carone and the others were expected to be arraigned in Brooklyn federal court on Wednesday. Their indictment remained sealed on Wednesday, so the exact charges were not immediately known.

The case centers on a city contract issued during the Adams administration, sources told ABC News.

Carone helped with Adams’ transition into office in January 2022 and served as the mayor’s chief of staff until that December, when he departed the administration. He said as he departed that it had been an “honor keeping the trains running for this administration,” according to a press release from the time.

This is a developing story. Please check back for updates.

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