Former Federal Reserve Chair Jerome Powell has warned of the risk of politicizing monetary policy, amid President Donald Trump’s sustained attacks on the central bank’s independence.
Speaking at an awards ceremony in Boston on Sunday (March 30), Powell said the Fed is undergoing a stress test, much like many other institutions under the Trump administration.
Powell stressed that the U.S. Congress wisely chose to insulate the central bank from political pressure, adding that all other advanced economies have similar norms to protect monetary policy independence.
“These protections have served the public well, and administrations from both parties have respected them,” Powell said after accepting the 2026 John F. Kennedy Profile in Courage Award.
“If any administration seeks to fire Fed officials over policy disagreements, future administrations will do the same. The public will lose confidence that the central bank makes decisions based solely on what is best for all Americans,” Powell warned.
The former Fed chair, who stepped down from leading the central bank last month, said the Fed’s credibility would be lost in such a scenario. “That credibility allows the Fed to support a strong and stable economy for the benefit of American families and businesses. Our credibility has been built and maintained over decades, and we are obligated to protect that invaluable asset for our fellow citizens and for future generations,” he said.
Powell, who remains a member of the Fed’s Board of Governors after leaving the chairmanship, also broadly defended democratic institutions. “Political party differences are normal—even essential—in a thriving democracy. But we should unite in our commitment to the higher principles that define our nation. Above all, respect for the rule of law,” he asserted.
Though not directly naming Trump, the U.S. president has waged a sustained pressure campaign against the central bank for not complying with demands for deeper interest rate cuts. Trump repeatedly threatened to fire Powell during his tenure, while Trump ally Jeanine Pirro once launched a brief criminal investigation into Powell’s congressional testimony regarding renovations to the Fed’s headquarters.
Trump also ordered the removal of Fed Governor Lisa Cook over unsubstantiated mortgage fraud allegations, but the Supreme Court ruled she could remain in her position while reviewing a legal appeal over the dismissal.
Under the Federal Reserve Act, the U.S. president must show cause—typically understood as misconduct—to remove any Fed governor.
