Powell warns political pressure risks Fed credibility
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- Jerome Powell warned the Fed 'has been undergoing a stress test' at Sunday's JFK Profile in Courage Award ceremony, saying that if any administration removes officials over policy differences, 'the public would lose faith' and 'the Fed's credibility would be lost.'
- Powell finished his second four-year term as Fed chair a few weeks ago, two days after the Senate confirmed his successor Kevin Warsh as the next head of the central bank.
- President Trump had repeatedly derided, berated, and threatened to fire Powell during his tenure, per The Hill's account of the feud.
- In December, Powell announced he and the Fed were under criminal investigation by the Justice Department over headquarters renovations; U.S. Attorney Jeanine Pirro announced in late April that DOJ was closing the probe.
- Powell retains a separate 14-year term as a Fed board member that runs until 2028 and has said he will stay at the institution until he is convinced of its independence.
Why it matters: Powell's warning lands weeks after his exit as chair and with Trump-appointed successor Kevin Warsh now running the Fed. He retains a board seat through 2028 and has said he'll stay until convinced of the institution's independence — giving him an internal position to press the credibility case he just made publicly. The Fed's credibility, he argued, underwrites its ability to support a stable economy.
