Powell Won’t Save the Fed With Silence

For the past six months, President Donald Trump has carried out a relentless public campaign in favor of Federal Reserve rate cuts, including ad hominem attacks on Chair Jerome Powell. In a speech Friday at the year’s most important central banking symposium, Powell kept his head down and focused on the macroeconomic outlook and the central bank’s policy framework, turning the other cheek as he has repeatedly over the course of both Trump presidencies.

But with the attempted firing of Governor Lisa Cook, Trump’s attack on Fed independence has now moved from bluster to action. Even if Trump’s efforts fail in court, they’re already eroding the faith that Fed officials can fulfill their congressional mandate of stable prices and maximum employment free from political influence. Powell needs to send a very clear message that the institution remains strong and can’t be bullied into submission. A written Fed statement on Tuesday was a start, but doesn’t go far enough.