Jerome Powell is defending his front-row seat at a Supreme Court showdown that could reshape the Federal Reserve’s future. At a press conference Wednesday after the Fed held its key interest rate steady, the Fed chair said he attended last week’s arguments in a case over whether President Trump can fire Fed Governor Lisa Cook because he believes it may be “the most important legal case” in the central bank’s 113-year history. Powell said that, given the stakes for the Fed’s independence, “it might be hard to explain why I didn’t attend,” CNBC reports.
The case tests how far a president can go in removing Fed officials, a move critics say could open the door to direct White House pressure over interest rates. Trump has argued he had the authority to oust Cook, citing mortgage fraud allegations; Supreme Court justices signaled concern about the broader implications for central bank autonomy and appeared inclined to allow Cook to stay at the Fed. Powell noted that former Fed Chair Paul Volcker once went to a Supreme Court hearing, which he took as precedent for his own appearance. Treasury Secretary Scott Bessent has called Powell’s attendance a “mistake” that risks politicizing the dispute.
Powell, who is also facing a federal criminal probe tied to his testimony about renovations at the Fed’s headquarters, warned that blurring the line between politics and monetary policy could permanently damage the institution’s credibility. “The point of independence is not to protect policymakers,” he said, but to follow a model used by other advanced democracies. Lose that separation, he added, and it would be “hard to restore” trust in the Fed.
He described the Fed’s independence as “just an institutional arrangement that has served the people well” and said he was confident that the central bank would be able to retain its independence, the New York Times reports. With Trump free to name a successor as Powell’s term ends in May, the chair offered one parting piece of guidance to whoever takes his seat: “Don’t get pulled into elected politics. Don’t do it.”
