Jerome Powell took thinly veiled swipes at Donald Trump at his first major public appearance since stepping down as chair of the Federal Reserve.
During a speech accepting this year’s John F. Kennedy Profile in Courage Award, Powell warned that America’s central bank is going through a “stress test” amid ongoing pressure tactics from the 79-year-old president that threaten its independence.
Trump had long attacked Powell as “stupid,” a “dummy,” and a “knucklehead” for refusing to slash interest rates as quickly as the president wanted.
Trump’s Department of Justice goon, U.S. Attorney Jeanine Pirro, also launched a federal investigation into Powell over the cost of renovations to the Fed’s headquarters. Pirro ultimately abandoned the probe as Republican Sen. Thom Tillis vowed to block the confirmation of Kevin Warsh, Trump’s pick to succeed Powell, until the investigation was dropped.
While not mentioning Trump by name during his speech at the John F. Kennedy Presidential Library in Boston, Powell delivered a pointed warning about the president’s actions, including his threats to fire Federal Reserve officials he does not like.
“Like many other institutions, the Fed has been undergoing a stress test,” Powell said. “Congress wisely chose to insulate monetary policy decisions from political pressure. All other advanced economies have done the same.”
As well as trying to pressure Powell to lower interest rates or resign as Fed chair early, Trump also sought to remove Federal Reserve Governor Lisa Cook during his feud with America’s central bank.
Cook is facing a highly dubious mortgage-fraud investigation and has sued the administration over the unprecedented attempts to have her fired. Powell, who took the unusual step of keeping his seat on the Fed’s governing board after stepping down as chair to prevent Trump from appointing a new member, also warned of the consequences of allowing politicians to bend the central bank to their whims.
“Administrations play no role in the selection or oversight of the 12 Reserve Bank presidents. These protections have served the public well, and administrations from both political parties have respected them,” Powell said.
“If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well. The public would lose faith that the central bank will make decisions based only on what’s best for all Americans,” he said. “The Fed’s credibility would be lost. That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses.”
Powell was awarded the John F. Kennedy Profile in Courage Award for his efforts to preserve the Federal Reserve’s independence during his tenure as chair.
Powell admitted that some of his unpopular decisions, such as not raising interest rates quickly enough after the COVID-19 pandemic, were made based on the bank’s “best economic analysis,” rather than political pressure or bias.
“At the Fed, we are, of course, human and thus imperfect. When we make mistakes, we acknowledge them and change course,” Powell said.
“We do not take into account the fortunes of any political party or politician in taking those decisions.”
In response, White House spokesman Kush Desai told the Daily Beast: “After years of bungled policy decisions and billions in cost overruns for a renovation project, the Federal Reserve is now in good hands under the leadership of Chairman Kevin Warsh.”
