Powell warns political interference could destroy Fed credibility in first speech since leaving chair

Former Federal Reserve Chair Jerome Powell warned Sunday night that a single act of political interference in monetary policy could permanently destroy public trust in the central bank, calling the institution's current situation a "stress test." Accepting the 2026 John F. Kennedy Profile in Courage award in Boston, Powell said the Fed's credibility, built over decades, would be lost if administrations remove officials over policy differences. His remarks come as the Supreme Court weighs a decision on the firing of Fed Governor Lisa Cook, whom President Donald Trump attempted to remove last August.

"If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well," Powell said in his acceptance speech at the John F. Kennedy Presidential Library and Museum. "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."

Powell stepped down as Fed chair last month and was succeeded by Kevin Warsh, who was sworn in on May 22, but remains on the Fed's board of governors. He said Fed officials "hold office with legal protection against removal" and serve "long terms unrelated to the four-year presidential election cycle." Congress, he noted, "wisely chose to insulate monetary policy decisions from political pressure," and those protections "have served the public well" across administrations of both parties.

"We do not take into account the fortunes of any political party or politician," Powell said. Fed decisions are made "based only on our best economic analysis of what would most benefit the people we serve."

The JFK Library Foundation said it was honoring Powell for withstanding "years of personal attacks and threats from the highest levels of government," noting that he "refused to let political forces dictate monetary policy."

The Supreme Court is weighing a decision on the fate of Fed Governor Lisa Cook, whom Trump attempted to fire last August, citing what he described as "deceitful and potentially criminal conduct" relating to mortgage transactions. Cook denied any wrongdoing and refused to leave. A federal district judge blocked the firing in September, concluding that Cook's alleged conduct could not constitute lawful cause for dismissal because it occurred before she took office. Powell attended the January oral arguments and called the case "perhaps the most important legal case in the Fed's 113-year history." A final ruling is expected before the court rises for summer, typically in late June.

Quoting philosopher Edmund Burke, Powell warned that democratic institutions "take much time, effort, and patience to build but can be torn down all too quickly."