Powell's warning
Key takeaways
- Former Federal Reserve Chair Jerome Powell on Sunday warned of growing political pressure on the central bank, saying it “has been undergoing a stress test.”
- “If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well.
- Welcome to The Hill’s Business & Economy newsletter, I’m Sylvan Lane — covering the intersection of Wall Street and Pennsylvania Avenue.
Why this matters: political developments that affect policy direction and public trust.
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Former Federal Reserve Chair Jerome Powell on Sunday warned of growing political pressure on the central bank, saying it “has been undergoing a stress test.”
“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 only on what’s best for all Americans. The Fed’s credibility would be lost,” Powell said during the John F. Kennedy Profile in Courage Award ceremony. “That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses. [Our] credibility has been built and sustained over many decades, and we have a duty to safeguard that priceless asset for our fellow citizens and for generations to come.” Powell, who repeatedly faced pressure from President Trump, finished his second four-year term as chair of the Fed board a few weeks ago. The end of his term came two days after his successor, Kevin Warsh, was confirmed by the Senate as the Fed’s next head.Trump had long gone after Powell, deriding, berating and threatening to fire the ex-Fed chair. In December, Powell announced that he and the Fed were under criminal investigation from the Justice Department, which was investigating his handling of renovations to the Fed’s headquarters and his testimony on the matter in front of the Senate. U.S. Attorney Jeanine Pirro in late April announced that the Justice Department was closing the probe. Powell’s separate 14-year term as a member of the Fed board is not up until 2028. While most Fed chairs left the bank once they were no longer in the top job, Powell has said he would stay at the Fed until he was convinced of its independence.