Powell Indirectly Criticizes Trump: "If Fed Officials Are Fired for Not Following the Administration, Trust in the Fed Will Plummet"

Mentions 'Stress Test' in Speech
Warns Again: "Trust in the Fed Will Be Shaken"
Market Focuses on Choice of New Chair Warsh

Jerome Powell, who recently stepped down as Chairman of the U.S. Federal Reserve (Fed), indirectly criticized U.S. President Donald Trump by stating that the Fed is currently "undergoing a stress test."

On April 29 (local time), Jerome Powell, former Chairman of the U.S. Federal Reserve (Fed), held a press conference. Photo by AP News

On May 31 (local time), during his speech at the 'Profile in Courage Award' ceremony hosted by the John F. Kennedy Foundation in Boston, Powell said, "If any administration finds a way to dismiss Fed officials over policy differences, subsequent administrations will do the same." He added this remark, alluding to the financial term "stress test," which refers to an assessment of whether banks and other institutions can withstand extreme crises such as financial meltdowns or wars.

He continued, "The public will lose faith that the central bank makes decisions solely based on what is best for all Americans," adding, "If that happens, trust in the Fed will disappear, and it is precisely that trust which enables a strong and stable economy."

Although Powell did not directly mention Trump in his prepared speech, his criticism is widely interpreted as targeting the president. Previously, President Trump had publicly criticized Powell—who refused to cut interest rates—calling him "slow Powell," a "fool," and "stupid."

The U.S. federal prosecutors launched a criminal investigation targeting Powell over issues related to the $2.5 billion remodeling project at the Fed's headquarters, but the investigation was halted in April. President Trump also attempted to dismiss another Fed board member, Lisa Cook, over allegations of mortgage fraud.

Powell stated, "Partisan political conflict is both normal and essential in a healthy democracy," but stressed, "However, we must unite around the higher principles that define our nation—chief among them, respect for the rule of law."

In his first public remarks after leaving office, Powell said, "Other countries regard the United States as a nation built on integrity," emphasizing, "That integrity must be preserved." He added, "President Kennedy upheld that tradition and stood against the rise of authoritarianism, which runs counter to American values."

Meanwhile, during the inauguration of his successor, Fed Chair Kevin Warsh, President Trump stated, "I want him to be completely independent. He shouldn't look at me or anyone else—he should just do his job well." It was anticipated that Trump's influence, as someone who has advocated for an early cut in the benchmark interest rate, would still impact the new Fed chair's decisions.

Separately, Powell recently decided to remain on the Fed’s Board of Governors after his term as chair ended, a move reported by the Financial Times (FT) and others as the first such case in nearly 80 years. It is believed that concerns over the Trump administration's threats to the Fed's independence played a significant role in his decision.

This content was produced with the assistance of AI translation services.