Powell: Fed credibility at risk if presidents can fire officials

Former Federal Reserve chair Jerome Powell warned on June 1 in Boston that the central bank would lose the public trust needed to manage the economy and “won’t survive” if a president can remove Fed officials for policy disagreements. He made the remarks while accepting the John F. Kennedy Profile in Courage Award.

The remarks came as the Supreme Court considers President Donald Trump’s effort to remove Fed Governor Lisa Cook over mortgage-fraud allegations that have not been proven in court. Legal observers and policymakers say the case could clarify whether a sitting president has broad authority to oust governors, a change that would affect how the Fed is governed.

Powell stepped down as chair earlier in 2026 but remains a member of the Board of Governors and intends to serve until his term ends in January 2028. Kevin Warsh took the Fed chair oath and assumed policy leadership after unanimous backing from the Federal Open Market Committee; his confirmation drew sharp divisions among lawmakers over the issue of independence.

Market participants note the Fed sets the cost of borrowing and that its perceived independence shapes expectations for interest rates, the value of the dollar and demand for risk assets. Some traders link potential political interference with expectations of looser policy, higher inflation forecasts and a weaker dollar. A number of investors in cryptocurrencies view those shifts as likely to affect liquidity and demand for assets such as bitcoin.

Analysts say a Supreme Court ruling that affirms presidential removal power could increase volatility in equities and digital-asset markets by creating uncertainty about the path of monetary policy. Powell argued the central bank needs the ability to make decisions without the threat of removal for holding unpopular views.

Powell indicated he will continue to speak from his governor’s seat as the case proceeds and warned that a decision affirming presidential removal authority would give future administrations the same leverage to change the central bank’s leadership.