Powell warns of risk to Fed credibility

本站添加: 2026-06-03

[00:00:00]What the public has every right to expect is that we will make our decisions based only on our best economic analysis of what would most benefit the people we serve. We do not take into account the fortunes of any political party or politician in making those decisions.

[00:00:27]Like so many other institutions, the Fed has been undergoing a stress test.

[00:00:33]Congress wisely chose to insulate monetary policy decisions from political pressure.

[00:00:39]All other advanced economy nations have done the same. Our federated structure is a bit complex with reserve banks and the board and all that, but the legal protections that support the non-political conduct of monetary policy are straightforward. Fed governors and reserve bank presidents hold office with legal protection against removal. We serve long terms unrelated to the four-year presidential election cycle.

[00:01:06]When a new administration takes office, its role is to fill vacancies on the boards of board of governors and for chair and vice chair as and when those vacancies arise, subject in all cases to Senate confirmation.

[00:01:22]administrations play no role in the selection or oversight of the 12 Reserve Bank presidents.

[00:01:32]These protections have served the public well and administrations from both political parties have respected them.

[00:01:40]If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well. 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.

[00:02:00]That credibility enables the Fed to support a strong and stable economy for the benefit of American families and businesses. Credibility has been built and sustained over many decades, and we have a duty to safeguard that priceless asset for our fellow citizens and for generations to