Jerome Powell used his first major appearance since being replaced as Fed chair last month to warn against the dangers of political meddling, i.e., the thing he had to deal with from Donald Trump on a near-daily basis while running the central bank — and that his successor may soon face if he doesn’t cut interest rates like yesterday.
Without ever mentioning the president by name, Powell said on Sunday night that “like many other institutions, the Fed has been undergoing a stress test,” referring to the pressure and attacks that have come from the White House. “Congress wisely chose to insulate monetary policy decisions from political pressure,” he added. “All other advanced economy nations have done the same … If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well. The public would lose faith that the central bank will make decisions based only on what’s best for all Americans. The Fed’s credibility would be lost. That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses.”
Powell was in Boston accepting the John F. Kennedy Profile in Courage Award, which the foundation said in March was going to him for safeguarding the Federal Reserve’s independence “despite years of personal attacks and threats from the highest levels of government.” Jack Schlossberg, a Democratic congressional candidate and JFK Jr.’s grandson, said in introducing Powell on Sunday that “few have done more under more difficult circumstances.” As a reminder, those attacks included but were not limited to Trump calling Powell “a FOOL, who doesn’t have a clue” on social media; referring to Powell as “low IQ for what he does” and “a very stupid person”; describing Powell as “a stubborn mule and a stupid person that is making a big mistake”; and calling him “a knucklehead,” a “numbskull,” and a “moron.” Oh, and there was also that criminal investigation into office renovations, which was absolutely about office renovations and was in no way intended to turn up the pressure on Powell to lower interest rates after personal attacks failed to get the job done.
