Jerome Powell, Fed
The Trump administration’s new legal assault on the Federal Reserve further threatens the central bank’s independence and makes it harder for the Fed’s next chief to do their job, according to Scope Ratings. In a statement on Monday, the European credit assessor observed that the criminal probe into Chair Jerome Powell is another example of the sort of policy that prompted the company to cut the U.S.’s debt rating in October to its fourth-highest rung, placing it on the same level as France.
“This reflects one of the main negative drivers for the downgrade of the U.S. sovereign rating to AA-,” said Eiko Sievert, Scope’s executive director for sovereign and public sector. “The legal action the central bank is now facing further intensifies the growing political and legal pressure from the executive branch on the independence and credibility of a key pillar of U.S. governance.”
Scope takes a notably dimmer view of America than rivals, with its downgrade last year bringing the country to a level that is two steps down from major assessors such as Moody’s Ratings. By contrast, the United States did not lose its top score from Moody’s until last May.
Powell revealed late on Sunday that the Fed had been served with grand jury subpoenas from the Justice Department, ratcheting up legal pressure on the central bank at a time when it is already contending with President Donald Trump’s calls for interest rate cuts and his attempt to fire another of its senior officials.
“The growing political scrutiny, including the attempted dismissal of Governor Lisa Cook last year, will pose a significant challenge for the Fed’s next chairman to operate with the traditional degree of independence that markets have been accustomed to,” Sievert wrote. “Broad weakening of governance standards in the U.S. increases the risk of policy missteps, including by the Fed.”
He went on to warn that faster price growth could cause the central bank to miss its inflation goal, threatening higher risk premiums and further squeezing the public finances. Meanwhile, discord in Congress over raising the debt ceiling is unlikely to subside.
“This makes the results of the November 2026 midterms a key determinant of whether a renewed political standoff and the associated risk of a near or technical default emerges,” he said.
Scope is among only five companies used by the European Central Bank (ECB) to assess collateral, and the sole one based in Europe. The others are Fitch Ratings, Moody’s, S&P Global Ratings, and Morningstar DBRS.
————————————————————
Copyright 2026 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.