Carlyle CEO Asserts Powell Investigation Strengthens Fed's Institutional Independence

Carlyle Group CEO Kewsong Lee emphasized that the formal probe into Federal Reserve Chair Jerome Powell reinforces the Fed’s institutional independence. Speaking at a private financial forum in Washington, D.C., Lee noted that the fact that the investigation is being conducted by an independent oversight body—rather than political appointees—signals confidence in the Fed’s self-correcting mechanisms. The inquiry, launched in late 2025 by the House Committee on Oversight and Reform, focuses on Powell’s handling of interest rate decisions between 2022 and 2024, particularly during periods of elevated inflation and banking sector stress. While no formal charges have been filed, the probe has drawn attention to the Fed's transparency and accountability. Lee pointed out that the investigation’s progression without external political interference reflects a system where oversight is functional but insulated from partisan influence. Key figures from the investigation include the Federal Reserve’s Board of Governors, which has released 14,000 pages of internal communications under subpoena, and the Government Accountability Office (GAO), which has reviewed 118 monetary policy meetings. These disclosures have not altered the Fed’s policy trajectory, with the federal funds rate remaining at 5.5% as of January 2026, unchanged since September 2024. Market participants, including institutional investors managing over $1.8 trillion in assets, have responded positively. The S&P 500 rose 1.2% in the two days following Lee’s remarks, while Treasury yields on the 10-year note fell to 4.03%, signaling confidence in the Fed’s credibility. The Federal Reserve Bank of New York and the Office of the Comptroller of the Currency have both reiterated their support for the investigation’s integrity.