Powell’s Best Efforts Can’t Save the Fed’s Independence
Mission impossible?
Photographer: Tom Williams/CQ-Roll Call, Inc./Getty Images
President Donald Trump’s determination to direct monetary policy has suffered a notable setback. Federal Reserve Chair Jerome Powell’s bold response last week to a threatened criminal investigation seemed to set the White House on its heels. Together with support for Powell from a surprising array of other central-bank governors, financiers, leading economists and even — good heavens — from one or two actual members of Congress, it undoubtedly shifted the terrain.
For the moment, that is. To restore or entrench the Federal Reserve’s independence, you need one of two things: either a president who respects the Fed’s good faith and technical expertise and is therefore willing to entrust it with monetary policy; or a Congress willing to assert itself to the same end. Right now, the US has neither.