Powell warns about the independence of the Federal Reserve

According to an article by "Federal Reserve Mouthpiece" Nick Timiraos, in a speech on Sunday evening local time, former Federal Reserve Chairman Powell stated that if any administration finds an excuse to dismiss Federal Reserve officials simply due to policy disagreements, the Federal Reserve will not be able to survive. Powell currently serves as a Federal Reserve Governor. While speaking generally about topics such as institutions and the rule of law, he did not name any specific president or express any personal grievances. However, when discussing the institutional framework designed to keep monetary policy decision-making power out of presidential control, his wording was extremely precise.

Powell emphasized the legal protections aimed at preventing Federal Reserve officials from being arbitrarily dismissed and specifically pointed out that the executive branch "does not play any role in selecting or overseeing the 12 regional reserve bank presidents," who, along with the Federal Reserve Governors, vote together to determine interest rates. "If any administration finds an excuse to dismiss Federal Reserve officials simply due to policy disagreements, then future administrations will surely follow suit," Powell said.

He noted that the credibility built up by the Federal Reserve over decades is an "invaluable asset," and he and his colleagues "have a responsibility to defend it."