Former Federal Reserve Chair Jerome Powell warned Sunday that political pressure on the central bank will erode public confidence in its independence, delivering his sharpest public criticism of the Trump administration since his term ended last month.
Powell accepted the John F. Kennedy Profile in Courage Award at the Kennedy Library Foundation in Boston and used the occasion to put on record his view that the Fed, along with courts and universities, is facing a political “stress test” from the White House.
“If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well,” Powell said. “The public would lose faith that the central bank will make decisions based only on what’s best for all Americans.”
Powell’s term as Fed chair ended May 15. President Trump’s new pick, Kevin Warsh, was sworn in on May 22. Despite stepping down from the chairmanship, Powell has chosen to remain on the board as a Fed governor. That decision effectively blocks Trump from filling the vacancy Powell’s departure would have otherwise created.
In his remarks, Powell pointed to three episodes he framed as threats to the Fed’s independence: the White House’s public push for his resignation, a Department of Justice criminal investigation into the $2.5 billion renovation of the Fed’s Washington headquarters, and attempts by the administration to remove Fed Governor Lisa Cook.
The DOJ probe opened in January and was dropped in April. At the time, Powell said the investigation traced back to Trump’s frustration with the Fed’s refusal to cut interest rates at the pace the president wanted.
“Democratic institutions take much time, effort, and patience to build but can be torn down all too quickly,” Powell said. “It is essential that we preserve what is good about these institutions, even as we strive to improve them.”
The JFK Profile in Courage Award has previously gone to figures including John McCain and Barack Obama. Sunday’s ceremony marked Powell’s first significant public remarks since leaving the chairmanship.
