USA01 June, 20262 min read
Jerome Powell Warns Political Pressure Threatens Fed Independence, Credibility in Boston Speech
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Powell warned political pressure threatens Fed independence and credibility in Boston remarks. Trump’s attacks on independence described as a stress test for the Fed.
Powell’s stress test warning
Former Federal Reserve Chair Jerome Powell used an award speech at the John F. Kennedy Presidential Library in Boston to warn that the Fed is facing a political “stress test” that threatens its independence and credibility.
Powell said, “Like many other institutions, the Fed has been undergoing a stress test,” and argued that “Congress wisely chose to insulate monetary policy decisions from political pressure.”
He spoke after his term as Fed chair ended on May 15 and after President Donald Trump selected Kevin Warsh to succeed him.
Powell also said, “At the Fed, we are, of course, human and thus imperfect,” and added, “When we make mistakes, we acknowledge them and change course.”
Courts, Cook, and credibility
Powell warned that if an administration finds a way to remove Fed officials over policy differences, “then future administrations will do so as well,” and he said “The public would lose faith that the central bank will make decisions based only on what’s best for all Americans.” The remarks came as the Supreme Court was set to rule on Trump’s attempted removal of Fed Governor Lisa Cook, with Cook rejecting the charges as baseless and calling them politically motivated.
ABC News described Powell’s warning as a defense of Fed independence “coming just weeks after Powell stepped down from his role as head of the central bank,” while noting Powell remains on the Federal Reserve’s 12-person board of governors. Axios reported that Powell said the Fed’s credibility would be “lost” if officials could be removed over policy differences, and that “That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses.”
Institutions and what’s at risk
Powell framed his defense of independent institutions beyond the Fed, telling the audience that universities, courts, Congress and the central bank are “the foundation and the embodiment of our democracy” and that the Fed’s independence is a “priceless asset” that must be protected.
He also tied the stakes to public trust, saying, “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.”
The speech occurred alongside recognition for Minnesota’s Twin Cities residents at the John F. Kennedy Profile in Courage Award, including Tim Granger’s remark, “It’s wonderful just to be invited, honoring Renée,” after Renée Good and nurse Alex Pretti were killed while observing or documenting enforcement activity.
The Los Angeles Times reported that Powell stepped down as chair when his term expired in May and that he kept his seat on the Fed’s governing board until January 2028, depriving the Trump administration of an opportunity to appoint another member of the board.