In a strong rebuke to President Donald Trump, the four living former leaders of the Federal Reserve say that the head of the nation’s central bank should be able to make interest-rate decisions free of political pressure and the threat of being removed or demoted.

The former chairs — Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen — argued in an opinion piece published Tuesday in The Wall Street Journal that history has proven that central banks deliver the best results for the economy when they act “independently of short-term political pressures.”

Current Fed Chairman Jerome Powell has come under heavy attacks from Trump, who has repeatedly attacked Powell’s decisions and has reportedly explored the possibility of either firing Powell or demoting him as Fed chairman.

Powell, the only Republican on the Fed’s seven-member board at the time, was tapped by Trump to replace Yellen as Fed chairman starting in February 2018 after Trump decided not to offer Yellen a second four-year term.

For the past year, Powell has been subjected to a steady stream of attacks from Trump who was unhappy that the Fed raised rates four times last year and has been slow to cut rates this year. The Fed did slash its key policy rate by a quarter-point last week and economists believe that more rate cuts are coming to cushion the U.S. economy from the turbulence stirred up by Trump’s trade battle with China.

“Collectively, we served our nation across nearly 40 years and were appointed and reappointed by six presidents, both Republican and Democratic,” the four former Fed leaders wrote, saying they had to make difficult decisions to guide the economy.

“In retrospect, not all our choices were perfect. But we believe those decisions were better for being the product of nonpartisan, nonpolitical assessments … rather than being motivated by short-term political advantage,” the former Fed officials wrote.

The opinion piece stated that Fed board members are safeguarded from political interference by being appointed for lengthy 14-year board terms and the provision that Fed board members, including the chair and vice chairs, “may be removed only for a cause related to violations of law or similar misbehavior and not for policy differences with political leaders.”

Related Stories
‹
As the Causes of US Inflation Grow, so Do the Dangers
Written by CHRISTOPHER RUGABER What keeps driving inflation so high? The answer, it seems, is nearly everything. Supply chain snarls and parts shortages inflated the cost of factory goods when the economy rocketed out of the pandemic recession two years ago. Then it was a surge in consumer spending fueled by federal stimulus checks. Then Russia’s invasion […]
Biggest Rate Hike in Years Expected as Fed Tackles Inflation
Written by CHRISTOPHER RUGABER The Federal Reserve is expected Wednesday to announce its largest interest rate hike since 1994 — a bigger increase than it had previously signaled and a sign that the central bank is struggling to restrain stubbornly high inflation. The central bank is considered likely to raise its benchmark short-term rate by […]
Trump Attacks Federal Reserve Again, Wants Interest Rate Cut
President Donald Trump is continuing efforts to pressure the U.S. central bank system, saying the stock markets and economic growth would be much higher if not for its actions. Trump says the Federal Reserve “doesn’t know what it’s doing” and raised interest rates too quickly. The Republican president tweeted Monday “think of what it could […]
Fed's Likely Message: No Increase in Loan Rates Anytime Soon
The soothing message the Federal Reserve has been sending in recent weeks — no interest rate hikes are likely for months to come — will likely be reinforced when it ends its latest policy meeting Wednesday. It’s a theme that has pleased investors, aided borrowers and perhaps lent some support to the economy. The Fed […]
Powell says Trump's Attacks Played No Role in Rate Pause
Federal Reserve Chairman Jerome Powell says political attacks by President Donald Trump played no role in the Fed’s decision in January to signal that it planned to take a pause in hiking interest rates. He also said in an interview broadcast Sunday that he can’t be fired by the president and that he intends to […]
NC, US Economy Growing Slowly But Steadily
"All things considered, the economy's doing pretty well."
European Central Bank Does Not Foresee Recession and Cuts Interest Rates Again
The European Central Bank, which sets interest rates for the 20 countries, does not expect the bloc to slide into recession.
US Economy Grew at a Surprisingly Strong 3.3% Pace Last Quarter, Pointing to Continued Resilience
The economy grew at a brisk 3.3% annual pace from October through December, reflecting strong spending despite high interest rates.
US Hiring Stayed Strong in November Despite Fed Rate Hikes
Written by CHRISTOPHER RUGABER The nation’s employers kept hiring briskly in November despite high inflation and a slow-growing economy — a sign of resilience in the face of the Federal Reserve’s aggressive interest rate hikes. The economy added 263,000 jobs, while the unemployment rate stayed 3.7%, still near a 53-year low, the Labor Department said […]
Powell’s Stark Message: Inflation Fight May Cause Recession
Written by CHRISTOPHER RUGABER The Federal Reserve delivered its bluntest reckoning Wednesday of what it will take to finally tame painfully high inflation: Slower growth, higher unemployment and potentially a recession. Speaking at a news conference, Chair Jerome Powell acknowledged what many economists have been saying for months: That the Fed’s goal of engineering a […]
›