Jerome Powell and the Future of Fed Independence
5/15/202629 min
If you have a credit card, hope to buy a house, or just want stable grocery prices – let’s talk about the future of Fed independence!
It’s impossibly important for the Federal Reserve to steer monetary policy without political interference – an ideal pushed to its brink during Jerome Powell’s time as Fed Chair.
Powell’s Fed faced a once-in-a-century pandemic, oversaw the economy as inflation spiked to about 9 percent … went back down to nearly 2 percent … and has started to go back up as the U.S. has gone to war and continued to try and implement the most comprehensive tariffs since the early 1900s.
But perhaps Powell will be best remembered as a target – of angry tweets, speeches, and ultimately a criminal investigation, by the very president who nominated him in the first place.
On Powell’s last day as chair, we ask where his story fits into the sweep of history. We’ll hear from someone who was on the Fed Board when Powell was appointed … and when President Trump started to pressure Powell. Plus, we learn what to watch for to see if Fed Independence is crumbling – or holding – as a new Fed Chair nominated by President Trump takes office.
Recommend Listening:
- Happy Fed Independence Day
- The case for Fed independence in the Nixon tapes
- A primer on the Federal Reserve's independence
- Trump's unprecedented attack on the Fed
- Should presidents have more of a say in interest rates?
- Lisa Cook and the fight for the Fed
- What happens to central banks under pressure?
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This episode was hosted by Kenny Malone and Erika Beras. It was produced by Sam Yellowhorse Kesler, edited by Jess Jiang, fact-checked by Sierra Juarez, and engineered by Robert Rodriguez and Cena Loffredo. Planet Money*’s executive producer is Alex Goldmark.*
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Transcript preview
First 90 secondsErica Beras· Host0:01
[upbeat music] This is Planet Money from NPR. Today is Jerome Powell's last day as Fed Chair, at least. He'll still be on the Fed Board. That, he's allowed to do until 2028.
Kenny Malone· Host0:15
Now, some quick hits from what has been a, a pretty eventful tenure. The Powell Fed faced a once-in-a-century pandemic.
Erica Beras· Host0:22
Oversaw the economy as inflation spiked to 9.1% and then went back down to nearly 2%.
Kenny Malone· Host0:29
And now, as inflation has started to go back up, as the US has gone to war and continues to try and levy the most comprehensive tariffs since, like, the 1940s.
Erica Beras· Host0:40
But beyond all that, perhaps Powell will be most remembered as a target of angry tweets, speeches, ultimately a criminal investigation by President Trump and his administration, the very president who nominated him in the first place.
Kenny Malone· Host0:56
And I remember the moment we at Planet Money really started paying attention to the Trump-Powell tensions. It happened about 10 months after Powell was appointed back in 2018. The Federal Reserve had raised rates a few times. Inflation was still sort of uncomfortably high, and the day before the upcoming Fed meeting, President Trump tweets that it is, quote, "incredible" that, quote, "The Fed is even considering yet another interest rate hike," and then tweeted again the next day that the Fed better not, quote, "make yet another