Janet Yellen salutes Powell being ‘completely committed to the Fed’s independence’
Former Treasury secretary Janet Yellen has defended Federal Reserve Chairman Jerome Powell against calls for his resignation. Despite President Donald trump suggesting replacing Powell with Treasury Secretary Scott Bessent before Powell’s term ends in may 2026, Yellen strongly believes Powell should complete his term and is fully committed to maintaining the Fed’s independence. She emphasized that Powell can only be removed “for cause,” such as gross mismanagement or corruption, and stated there is no basis for such action.Powell, originally nominated by Trump in 2018 and previously appointed to the Federal Reserve Board by Barack Obama, has resisted Trump’s pressure to cut interest rates, awaiting the impacts of tariffs on prices before making policy changes. Meanwhile, Bessent has denied reports that he advised Trump against firing Powell, attributing leaking of partial information.
Janet Yellen salutes Powell being ‘completely committed to the Fed’s independence’
Former Treasury Secretary Janet Yellen defended Federal Reserve Chairman Jerome Powell against calls for his resignation.
President Donald Trump has floated replacing Powell, 72, who was nominated by Trump during his first term in 2018, with current Treasury Secretary Scott Bessent. Powell’s term is up in May 2026, and Yellen supported Powell finishing his term while on CNBC’s Squawk Box on Tuesday. The former treasury secretary was asked what she thought about Powell stepping down early.
“Well, I disagree with that strongly,” Yellen said. “I think Chair Powell is completely committed to the Fed’s independence.”
“And I think that he should fill out his term and stay on until his term expires in May,” she added.
Yellen dismissed Trump’s authority to terminate Powell as he could only do so “for cause.” When asked to elaborate, Yellen explained a just cause for termination would be, “Some gross mismanagement of monetary policy or the Fed or some corruption, a serious breach of his responsibilities as Fed chair.”
Yellen added that she doesn’t “believe there is any such basis.”
Meanwhile, Yellen’s successor, Bessent, batted away allegations about his recommendation that Trump not fire Powell. Bessent, who echoed Trump in denying the report, said the leaker behind the allegations only had “partial information.”
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Former President Barack Obama nominated Powell to serve on the Federal Reserve Board of Governors in 2012. It remains to be seen whether Powell will stay on as governor after his term as chairman is up. Powell avoided the question during a press conference Tuesday.
As Fed chairman, Powell has resisted Trump’s pushes to cut interest rates. Powell has said he is waiting for the tariffs to affect prices before making any changes.
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