Jerome Powell says the US central bank is undergoing a ‘stress test’ like other institutions in the current era.
Former US Federal Reserve Chair Jerome Powell has warned against the politicisation of monetary policy amid President Donald Trump’s repeated attacks on the independence of the central bank.
In a speech at an awards ceremony in Boston on Sunday, Powell said that the Fed had been undergoing a “stress test” like many other institutions in the Trump era.
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Powell said the US Congress had “wisely” chosen to insulate the central bank from political pressure and that all other advanced economies had similar norms upholding the independence of monetary policy.
“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 finds a way to remove Fed officials over policy differences, then future administrations will do so as well,” Powell said.
“The public would lose faith that the central bank will make decisions based only on what’s best for all Americans.”
Powell, who stepped down as the head of the central bank last month, said that the Fed’s credibility would be “lost” in such a scenario.
“That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses,” 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, who made the usual decision to stay on as one of the seven members of the Fed’s Board of Governors after stepping down as chair, also offered a broader defence of democratic institutions generally.
“Partisan political differences are normal – indeed essential – in a thriving democracy. But we ought to be united in our commitment to the higher principles that define our nation,” Powell said.
“Chief among them is respect for the rule of law. As John Adams wrote, ours is ‘a government of laws and not of men’. Our public institutions carry us forward through change. These institutions embody our commitment to freedom, democracy, and service of the public good.”
While Powell did not mention Trump by name, the US president has waged a sustained pressure campaign against the central bank for not heeding his demands to cut interest rates more sharply.
Trump repeatedly threatened Powell with dismissal during his tenure, while Trump appointee and ally Jeanine Pirro opened a short-lived criminal investigation into Powell’s congressional testimony about ongoing renovation works at the Fed’s headquarters.
Trump also ordered the removal of Fed governor Lisa Cook over unproven claims of mortgage fraud, though the Supreme Court has ruled that she can remain in her position while it considers a legal challenge against her firing.
Under the Federal Reserve Act, the US president must demonstrate “cause”, widely interpreted to mean malfeasance, to remove any of the Federal Reserve’s governors.
The John F Kennedy Profile in Courage Award was created in 1989 to honour those who demonstrate courage in public service without regard to professional or personal consequences.
Past winners of the award, which is named after Kennedy’s Pulitzer-winning book Profiles in Courage, include former US President Barack Obama, then-Ukrainian President Viktor Yushchenko, and then-UN Secretary-General Kofi Annan.
