US President Donald Trump’s relentless attacks on Federal Reserve Chair Jerome Powell have raised concerns about the central bank’s independence. Prominent economist Mohamed El-Erian has suggested that Powell should quit to protect the institution’s freedom, citing the potential threat to its credibility and the impact of future market volatility. However, many experts disagree, arguing that Powell’s resignation would create a “terrible precedent” and undermine the Fed’s ability to make decisions based on economic realities.
Former Federal Reserve officials, including Alan Blinder and Bill English, have expressed their support for Powell and criticized El-Erian’s views as misguided. They emphasize the importance of maintaining the Fed’s independence in order to avoid the risks of inflation and ensure stability in the financial system.
Even some within Trump’s administration acknowledge the value of Fed independence, with Treasury Secretary Scott Bessent defending Powell’s leadership and expertise. Experts also point to the potential consequences of a Fed resignation on market volatility, suggesting that rates might actually increase if Powell were to step down.
Powell himself has stated his commitment to serving out his term, saying he will “never leave this job voluntarily until my term ends under any circumstances.” The debate over his resignation is largely moot, with most experts confident in Powell’s ability to navigate the challenges posed by Trump’s attacks and maintain the Fed’s independence.
Source: https://edition.cnn.com/2025/07/22/business/trump-powell-fed-resign