Former Federal Reserve chair Jerome Powell has warned that attempts by the U.S. government to exert greater political pressure on the central bank will damage public confidence in its independence.
Powell — whose time as Fed chair concluded on May 15 — said the central bank, along with other institutions such as the courts and universities, is facing a political “stress test” from President Donald Trump’s administration.
Speaking at the John F. Kennedy Library Foundation in Boston, Powell highlighted the White House’s push for his resignation, a Department of Justice criminal investigation into his time as chair and attempts to fire Fed governor Lisa Cook.
“If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well,” Powell said while accepting the John F. Kennedy Profile in Courage Award. “The public would lose faith that the central bank will make decisions based only on what’s best for all Americans.”
Federal prosecutors in January began a probe into the $2.5 billion renovation of the central bank’s Washington, D.C. headquarters.
At the time, Powell said the investigation — which was later dropped in April — stemmed from Trump’s frustration with the Fed’s refusal to cut interest rates at the pace and volume the president wanted.
“Democratic institutions take much time, effort, and patience to build but can be torn down all too quickly,” Powell said in his first public remarks since his time as chair concluded.
“It is essential that we preserve what is good about these institutions, even as we strive to improve them.”
Powell’s successor as Fed chair Kevin Warsh was sworn in on May 22. Despite standing down at chair, Powell is continuing as a Fed governor.
