Prominent economist Mohamed El-Erian has made a startling move, urging Federal Reserve Chair Jerome Powell to voluntarily step down in order to ensure the central bank’s independence. This is a rare public stance by an influential economic voice, with many experts disagreeing with El-Erian’s view.
El-Erian believes that if Powell’s primary goal is to safeguard the Fed’s autonomy, then resignation would be the best course of action. However, he acknowledges that this outcome may not be ideal. Instead, he sees Powell’s departure as a better alternative than continuing in his current role, which El-Erian argues would only exacerbate growing threats to the Fed’s independence.
El-Erian cited Treasury Secretary Scott Bessent’s statement that the Fed is experiencing “mission creep,” or expanding beyond its core monetary policy responsibilities. This trend, combined with President Donald Trump’s criticism of Powell and the Fed’s decision to hold interest rates steady, has created economic uncertainty.
As tensions rise between the White House and the central bank, El-Erian’s call for Powell’s resignation highlights the ongoing struggle for the Fed’s independence.
Source: https://www.cnbc.com/2025/07/22/mohamed-el-erian-says-powell-should-resign-to-preserve-fed-independence.html