Former chairman Powell defends need for US Federal Reserve to maintain independence

WASHINGTON – Former US Federal Reserve chairman Jerome Powell on May 31 delivered a staunch defence of the need for the US central bank to maintain independence and credibility as it comes under assault from President Donald Trump.

“Like many other institutions, the Fed has been undergoing a stress test,” he said as he accepted an award from the John F. Kennedy Library Foundation.

“If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well,” he said in a barely veiled reference to the Trump administration’s attempt to fire Fed governor Lisa Cook.

“The public would lose faith that the central bank will make decisions based only on what is best for all Americans.”

In his second term in power, Trump has frequently criticised and insulted Powell, alleging he was too slow to lower interest rates.

Trump’s Justice Department went so far as to pursue criminal charges against the Fed chairman over a building renovation project. The probe was eventually dropped to smooth the path towards Powell’s successor being confirmed by the Senate.

Separately, Trump also sought to remove Cook over mortgage fraud allegations. The Supreme Court is due to rule on the legality of the move.

“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,” said Powell.

He received the John F. Kennedy Profile In Courage Award “for protecting the independence of the Federal Reserve”, the foundation said.

Powell stepped down as chairman at the end of his term earlier in May and has been succeeded by Trump nominee Kevin Warsh.

In an unusual move for outgoing Fed chiefs, Powell chose to remain on the board as a governor for the remainder of his term, which ends in 2028. He did so citing threats to the Fed’s independence and promised to keep a “low profile”.

Trump has welcomed Warsh’s taking over the Fed – after a protracted and divisive Senate confirmation process – and hosted a lavish ceremony at the White House for his swearing-in.

“The renewal... is good, and I think we are going to see a new sheriff in town,” Treasury Secretary Scott Bessent said on May 29.

Also given the award on May 31 were “The People of the Twin Cities of Minnesota” in recognition of “risking their lives to protect their neighbours and immigrant community members from an unprecedented federal law enforcement operation”, the foundation said.

Trump ordered a massive surge of immigration enforcement operations in the “twin cities” of St Paul and Minneapolis earlier in 2026, resulting in widespread demonstrations and the killings of at least two US citizen protesters and one migrant. AFP