Jerome Powell, the Chair of the U.S. Federal Reserve, has firmly rejected assertions that political motivations influence the central bank’s decisions, amidst ongoing debates about its independence. Former President Donald Trump has criticized Powell, labeling him “a very political guy” for not agreeing to his calls for significant reductions in interest rates.
The current administration has initiated a push to reshape the Federal Reserve’s Board of Governors. This includes appointing an administration official and attempting to remove a Biden appointee amidst unverified claims of mortgage fraud. Powell publicly addressed claims of political bias during an event in Rhode Island, stating that while many doubt the Fed’s objectivity, those who conceptually label it as political are often making unfounded accusations.
Powell did not directly name Trump but acknowledged that the former president is a prominent critic of the Fed’s actions since he returned to office. Last week, the Fed implemented its first interest rate cut since December to address instability in the labor market, while Trump’s tariffs have contributed to rising prices. Powell articulated the current economic challenges, noting that inflation risks are skewed upward, whereas employment risks are tilted downward.
Stephen Miran, a newly appointed Trump official on the Fed board, has exhibited differing views, opposing the board’s majority in favor of more aggressive rate reductions. Miran has expressed that minor changes in certain prices should not warrant heightened concern, arguing that tariffs could lead to considerable shifts in national savings. This divergence of opinion raises questions about the balance of power and influence within the Federal Reserve’s decision-making processes.
Source: https://www.theguardian.com/business/2025/sep/23/jerome-powell-trump-federal-reserve