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The Fed's Credibility Threatened, Jerome Powell Mocks Trump Administration

Former Chair of the United States Federal Reserve, Jerome Powell, issued a stern warning regarding the dangers of politicizing monetary policy amid a wave of pressure from President Donald Trump. In his speech accepting the 2026 John F. Kennedy Profile in Courage Award in Boston on Sunday (May 31), Powell stated that the Fed is currently undergoing a stress test situation that threatens the institution's independence. He emphasized the importance of isolating monetary policy from political interests to maintain public trust in national economic decisions.
​Powell, who recently stepped down as Fed Chair on May 15, 2026, and was replaced by Kevin Warsh, warned that the credibility of the institution would be destroyed if a government administration began dismissing central bank officials solely due to political differences. If such a bad precedent occurs, future administrations are likely to repeat similar actions. Although no longer serving as chair, Powell took an unusual step by remaining one of the seven members of the Fed Board of Governors to prevent the emergence of strategic vacancies that could be exploited for political purposes.
​This sharp statement from Powell was released following a series of intense pressures from Donald Trump, who frequently urged aggressive interest rate cuts. Tensions peaked through a brief criminal investigation against Powell related to the renovation of the Fed headquarters, as well as Trump’s unilateral decision to remove Fed Governor Lisa Cook over alleged unilateral accusations. Under applicable law, a U.S. president is legally prohibited from dismissing Fed governors unless they can prove violations of law or serious misconduct.