MW Jerome Powell warns that politicizing Fed will erode its credibility

By Mike Murphy

Former Fed Chair Jerome Powell receives the 2026 John F. Kennedy Profile in Courage Award on Sunday in Boston.

Former Fed Chair Jerome Powell on Sunday called the Federal Reserve's independence "a priceless asset" that must be protected, in one of his first major speeches since stepping down from his post earlier this month.

Speaking Sunday while accepting an award at the John F. Kennedy Presidential Library in Boston, Powell, who is still serving as a Fed governor, warned that "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."

"Our credibility has been built and sustained over many decades, and we have a duty to safeguard that priceless asset."Fed governor Jerome Powell

"Like many other institutions, the Fed has been undergoing a stress test," he said. "Our credibility has been built and sustained over many decades, and we have a duty to safeguard that priceless asset for our fellow citizens and for generations to come."

Powell spent much of the past year under attack from President Donald Trump, who has sought lower interest rates and threatened on multiple occasions to fire Powell. Powell also faced a criminal investigation over cost overruns for the Fed's headquarters that he and others said was politically motivated. Trump has also tried to oust Fed governor Lisa Cook; the Supreme Court is expected to rule on the legality of that move soon.

While Trump's hand-picked successor to Powell, Kevin Warsh, has supported lowering rates, the current environment of high inflation appears likely to prevent such a move anytime soon. The CME FedWatch tool gives 99% odds that the Fed will keep rates steady at its June meeting. In fact, many experts believe the Fed's next move will be a rate hike before year's end.

Read more: What would cause the Fed to hike rates this year? The answer might surprise you.

In his remarks Sunday, Powell, while never explicitly mentioning Trump, stressed that the Fed cannot let partisan differences interfere with economic policy.

"Central banks make monetary-policy decisions under high uncertainty," Powell said Sunday. While acknowledging that the central bank may make mistakes, "we do not take into account the fortunes of any political party or politician in making those decisions."

"It is essential that we preserve what is good about these institutions, even as we strive to improve them," he said.

-Mike Murphy

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May 31, 2026 22:41 ET (02:41 GMT)

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