Powell Issues Warning on Federal Reserve Independence

According to an article by "Fed Whisperer" Nick Timiraos, in a speech delivered on Sunday evening local time, former Federal Reserve Chairman Powell stated that if any administration finds a pretext to remove Fed officials simply due to policy disagreements, the Federal Reserve could not survive. Powell currently serves as a Federal Reserve Governor. Speaking broadly about topics such as institutions and the rule of law, he did not name any president, nor did he express any specific personal grievances. However, when it came to the institutional framework designed to keep monetary policy decision-making out of the control of the president, his wording was extremely precise.

Powell emphasized the legal protections aimed at preventing the arbitrary removal of Fed officials, specifically noting that the executive branch "plays no role in selecting or overseeing the 12 regional reserve bank presidents," who, along with Fed Governors, vote collectively to set interest rates. "If any administration finds a pretext to remove Fed officials simply due to policy disagreements, future administrations will inevitably follow suit," Powell said.

He pointed out that the credibility the Federal Reserve has built up over decades is an "invaluable asset," and it is the responsibility of him and his colleagues "to defend it." (Jinshi)