The Federal Reserve got a new legal headache Thursday when a money manager sued Chair Jerome Powell and other central bank policymakers in a Washington, D.C. federal court, arguing it is violating a 1976 federal law by keeping its monetary policy meetings behind closed doors.
The lawsuit from Azoria Capital asks the court to issue a temporary restraining order compelling the Fed’s Federal Open Market Committee (FOMC) to let the public see its deliberations starting next Tuesday and Wednesday, when central bank policy makers gather in Washington to decide on their next interest rate move.
The lawsuit comes as the Fed is under pressure on several fronts by President Trump, who is scheduled to visit Fed headquarters today along with other White House allies touring a $2.5 billion refurbishment of the central bank’s National Mall buildings. Trump and other administration officials have criticized the project for its cost overruns.
The money manager bringing the new lawsuit against Powell and other members of the FOMC, Azoria Capital, is led by CEO James Fishback, who is close to the Trump administration and served as an adviser to the Department of Government Efficiency, or DOGE.
Last year Fishback used Trump’s Mar-a-Lago Club as the setting to announce an anti-DEI exchange traded fund called the Azoria 500 Meritocracy ETF (SPXM) that this month began trading on the New York Stock Exchange.
Azoria argues in its suit that “by operating beyond public scrutiny, the FOMC is deliberately undermining the public accountability envisioned by Congress,” and that if a firm such as Azoria does not have real-time access to FOMC deliberations, it “cannot fully consider and protect itself against Federal Reserve policy shifts that can create volatility.”
Azoria also states in its suit that it “is deeply concerned that the FOMC, under Chair Jerome Powell, is maintaining high interest rates to undermine President Donald J. Trump and his economic agenda, to the detriment of American citizens and the American economy” and that current policy stance of the FOMC “appears politically motivated.”
Fishback made the administration aware of the suit before it was filed, according to a person familiar with the matter.
The FOMC has not changed interest rates since Trump took office, as many policymakers argue more time is needed to assess how Trump’s trade policies will affect inflation before reducing rates again. Trump has hammered Powell and the Fed repeatedly for this view, arguing that rates should be 3 percentage points lower.
Investors don’t expect the Fed to change rates at the meeting on July 29-30, although two Fed governors have said they could support a cut.
The Fed’s current policy stance, according to the suit filed by Azoria, “raises serious questions about whether politics, not economics, are driving monetary policy. These questions emphasize the need for transparency from the FOMC.”
The law in question cited by Azoria in its suit is the Government in the Sunshine Act of 1976, a law passed after President Nixon’s Watergate scandal roiled Washington and led to calls for increased transparency of US government.
The act requires that federal agencies keep their meetings open to the public. But it also allows for private meetings in cases covered as exemptions, including when the release of that information could be used in financial speculation.
The Fed has cited that exemption in justifying why it holds closed meetings when discussing monetary policy.
But Azoria says “not all FOMC deliberations inherently trigger financial speculation” and that the law states that to claim one of these exemptions, the agency must vote to invoke it and then within one day publish an explanation of why it made that decision.
Azoria said the FOMC has “brazenly flouted this mandate” for five decades, holding nothing but closed meetings since 1977.
“The FOMC’s decades-long policy of blanket secrecy is unlawful.”
Alexis Keenan contributed to this article.
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