Former Fed Chair Powell cautions that allowing administrations to remove officials over policy risks undermining central bank credibility.
Jerome Powell, former Federal Reserve Chair, warned that permitting administrations to remove Fed officials due to policy disagreements could erode the central bank’s independence. Speaking at a Boston event, Powell emphasized the Fed’s credibility as a critical asset requiring protection from political interference.
Powell’s remarks follow a Supreme Court case on former President Trump’s attempt to remove Governor Lisa Cook, the first such challenge in the Fed’s 113-year history. Two regional Fed presidencies, including the New York Fed, will open within two years, adding urgency to the debate over central bank autonomy.
The Fed’s structure shields regional presidents from executive branch oversight, but Powell stressed that any precedent allowing removals could be exploited by future administrations. His comments mark his first public address since stepping down as chair last week.