WASHINGTON, May 31 (Reuters) – On Sunday, U.S. Federal Reserve Governor Jerome Powell expressed concern over the effects of a politicized Federal Reserve and emphasized the importance of defending democratic institutions. These were his first public comments since concluding his eight-year tenure as the head of the central bank.
“Democratic institutions take much time, effort, and patience to build but can be torn down all too quickly,” Powell remarked in a prepared speech while accepting the John F. Kennedy Profile in Courage Award from the John F. Kennedy Library Foundation.
Powell stressed the necessity of safeguarding the positive aspects of these institutions while seeking improvements. He identified the Federal Reserve, alongside the courts and universities, as critical to the nation’s success and global stature. Powell noted that the Fed has been under significant pressure, citing attempts by President Donald Trump to dismiss Fed Governor Lisa Cook, demands for Powell’s resignation, and a criminal investigation involving him.
Powell’s term as chair officially ended on May 15, and Kevin Warsh was sworn in as the new Fed chair on May 22. Powell chose to remain as a Fed governor due to perceived ongoing threats to the Fed’s independence, a move that temporarily blocks Trump from appointing another board member.
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The structure of the Federal Reserve is designed to allow monetary policy decisions to be made without political interference. Powell stated, “these protections have served the public well, and administrations from both parties have respected them.” He warned that if an administration were to remove Fed officials over policy disagreements, it could set a precedent for future administrations, thereby eroding public trust in the Fed to make decisions based solely on the best interests of all Americans.
When announcing Powell’s award earlier this year, the foundation highlighted his role in protecting one of the nation’s key apolitical institutions and his exceptional courage amidst personal and professional challenges. The foundation also honored the citizens of Minneapolis and St. Paul for their response to increased immigration enforcement, including protests and efforts to oversee government actions.
(Reporting by Howard Schneider in Washington; Editing by Matthew Lewis)
