Protect the Independence of the Fed
The Federal Reserve's independence should be a top priority of Independent Republicans.
President Trump recently fired the two Democrats on the three-member board of the National Credit Union Administration, which regulates the country's credit unions.
The stability of financial markets depends on faith that the Fed operates independently from the White House.
These latest firings come following similar dismissals at other agencies that were formerly believed to be independent.
"The President appears to be moving closer to justifying removal of Democrats on the Federal Reserve Board," per a note from TD Cowen analyst Jaret Seiberg yesterday afternoon.
Fed Chairman Jerome Powell is adroitly handling his responsibilities under difficult circumstances complicated by the escalation of tariffs.
“The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Mr. Powell recently told the Economic Club of Chicago.
Powell’s term expires in May 2026.
He was appointed by Trump and is a Republican.
But trouble is brewing and replacing Powell is something on the minds of the executive branch: "we think about...all the time," Treasury Secretary Scott Bessent told Bloomberg on Monday, noting that interviews with candidates to replace Powell will begin as soon as this fall.
Powell is downplaying the threat to the Fed's independence during an interview at the Economic Club of Chicago yesterday.
"Generally speaking, Fed independence is very widely understood and supported in Washington, in Congress, where it really matters," he said.
“People can say whatever they want,” Mr. Powell, “That’s fine. That’s not a problem, but we will do what we do strictly without consideration of political or any other extraneous factors.”
Don’t take any norms or traditions for granted.
Let your representative know that preserving Fed independence is essential to financial market stability and the American brand.
