Former Federal Reserve Chair Jerome Powell has warned that growing political pressure on the US central bank could weaken public trust in monetary policy, a development closely watched by crypto and financial markets.
Speaking in Boston while accepting the John F. Kennedy Profile in Courage Award, Powell described the Federal Reserve as being in the middle of a “stress test” and argued that its independence remains essential for maintaining confidence in the US economy.
🚨Report: Former Federal Reserve Chair Jerome Powell says the Federal Reserve will not survive as an independent institution if officials can be removed over policy disagreements. pic.twitter.com/1ZBiS9r4dV
— The Calvin Coolidge Project (@TheCalvinCooli1) June 1, 2026
His remarks marked one of his strongest public defences of the central bank since stepping down as Fed chair on May 15, when Kevin Warsh succeeded him.
Powell defends the Federal Reserve’s independence
Without naming President Donald Trump directly, Powell addressed recent administration efforts to influence Federal Reserve policy.
The White House has repeatedly pushed for lower interest rates while supporting investigations into cost overruns linked to the Fed’s headquarters renovation project. The administration has also sought to remove Federal Reserve Governor Lisa Cook from the Board of Governors.
Powell warned that removing central bank officials over policy disagreements could set a dangerous precedent. He said future administrations may feel encouraged to take similar actions, increasing concerns that monetary policy decisions are being driven by politics rather than economic data.
According to Powell, the Federal Reserve’s credibility has been built over decades and remains one of its most valuable assets.
Powell remains on the Fed board through 2028
Unlike most former Fed chairs, Powell chose to remain on the Federal Reserve’s Board of Governors after leaving the top position. His term as a board member runs until January 2028.
His decision prevents the White House from immediately appointing another governor, even as legal challenges involving Lisa Cook continue.
Cook remains on the board after lower courts blocked attempts to remove her from office. The dispute has now reached the US Supreme Court, which is expected to rule on the matter later this year.
Powell has previously suggested that concerns over threats to Federal Reserve independence played a role in his decision to stay on the board.
Why crypto markets are watching
The debate over Federal Reserve independence carries significant implications for crypto markets, which remain highly sensitive to US monetary policy.
Interest rate decisions influence liquidity conditions, investor risk appetite, and capital flows into digital assets. Any perception that policy decisions are being shaped by political interests rather than economic conditions could increase uncertainty across financial markets.
Powell said Federal Reserve officials should be judged on the quality of their economic analysis and not on political outcomes, emphasizing that policy decisions must serve the broader economy rather than any administration or political party.
Enjoyed this? Bookmark DeFi Planet, explore related topics, and follow us on Twitter, LinkedIn, Facebook, Instagram, Threads and CoinMarketCap Community for seamless access to high-quality industry insights
Take control of your crypto portfolio with DEFI PLANET PRO, DeFi Planet’s suite of analytics tools.
