Powell warns about Fed independence issues

Odaily Planet Daily reported, according to an article by "Fed Whisperer" Nick Timiraos, in a speech on Sunday evening local time, former Fed Chairman Powell stated that if any administration finds a pretext to remove Fed officials solely due to policy disagreements, the Fed would not be able to survive. Powell currently serves as a Fed Governor. While speaking in general terms about institutions and the rule of law, he did not name any specific president nor express any particular personal grievances. However, his wording was extremely precise when it came to the institutional framework designed to keep monetary policy decisions out of presidential control.

Powell emphasized the legal protections aimed at preventing Fed officials from being arbitrarily removed and specifically pointed out that the executive branch "plays no role in selecting or supervising the 12 regional reserve bank presidents," who, together with the Fed Governors, vote on interest rate levels. "If any administration finds a pretext to remove Fed officials due to policy disagreements, future administrations will surely follow suit," Powell said.

He noted that the credibility the Fed has built up over decades is an "invaluable asset," and he and his colleagues have a "responsibility to defend it." (Jinshi)