Federal Reserve Chair Jerome Powell refused to answer three straight questions about politics during his press conference Wednesday. That’s typical for the just-the-facts persona he’s constructed for himself over the years. But near the end of his lengthy question-and-answer session, Powell got reflective and let the cat out of the bag.
When CNN’s Matt Egan asked what words of wisdom Powell would give his successor, who is set to take over when Powell’s term as chair ends in mid-May, the Fed chair paused for a moment, chuckled, and said he had three pieces of advice.
It was a touchingly human and thoughtful response. And it spoke volumes about the legacy Powell plans to leave at the institution he’s served for 14 years – nine as its chair. On Wednesday, he summed it up as his commitment to the “public well being” and staying out of politics.
The Trump administration’s crusade against the Fed has threatened the institution’s independence that Powell holds so dear. He has said the Fed needs to remain independent to maintain its credibility that allows it to serve the public by working to keep unemployment and inflation low.
The stakes are so high that the Fed leader deemed it appropriate to attend the oral arguments in the Supreme Court case of Fed Governor Lisa Cook, who is challenging Trump’s attempt to oust her. For Powell, none of that is political, but rather a fight for the Fed’s independence.
Over the past year, President Donald Trump and his allies have unleashed an unrelenting barrage of attacks against the Fed, claiming it has been too slow to lower borrowing costs. But it hasn’t been just name calling: The administration is actively arguing before the nation’s highest court why Cook, appointed by then-President Joe Biden, must be removed.
Powell’s reflection, though never mentioning Trump or his actions, seemed aimed directly at the president. If passed through a Fedspeak translation engine, it might look something like:
Because of Powell’s career-defining work to maintain the Fed’s independence, Trump’s attacks on the Fed are now backfiring. Instead, they have rallied support for the institution’s political independence, which the president has long sought to undermine.
Trump’s campaign against the Fed took a shocking twist earlier this month, with federal prosecutors investigating part of Powell’s congressional testimony last year that touched on an ongoing renovation of the central bank’s Washington, DC, headquarters.
The Fed chief pushed back against the administration in a stunning video released on January 12, describing the federal probe as a “pretext” to destroy Fed independence and usher in a world where “monetary policy will be directed by political pressure or intimidation.”