Powell issues warning on Fed independence

According to an article by "Fed Whisperer" Nick Timiraos, in a speech on Sunday evening local time, former Federal Reserve Chair Jerome Powell stated that if any administration finds a pretext to remove a Fed official solely due to policy disagreements, the Fed will cease to exist. 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 specific president or express any personal grievances. However, his language was remarkably precise when addressing the institutional framework designed to keep monetary policy decision-making out of presidential control.

Powell emphasized the legal protections intended to prevent the arbitrary removal of Fed officials, specifically noting that the executive branch "plays no role in the selection or oversight of the 12 regional Reserve Bank presidents," who vote alongside Fed Governors to set interest rates. "If any administration finds a pretext to remove a Fed official solely due to policy disagreements, future administrations will surely follow suit," Powell said.

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