Powell Defends Fed Actions Amid Trump’s Intensifying Criticism

Federal Reserve Chair Jerome Powell strongly defended the central bank's pandemic responses at a Princeton University address on Sunday while countering criticism from President Donald Trump and former Fed governor Kevin Warsh.

Powell delivered his speech at the baccalaureate ceremony preceding Princeton University commencement where he commended both public institutions and U.S. universities and government agencies which the Trump administration has recently targeted.

“With little warning, economies around the world came to a hard stop,” Powell said. “A prolonged worldwide economic depression presented itself as an imminent danger to our situation. All public attention shifted to the government while the Federal Reserve emerged as a primary emergency response institution.

Powell supported the Federal Reserve's choice to reduce interest rates to near-zero while implementing large asset purchases for financial market stabilization during the pandemic's initial stages. Through its bond-buying program totaling trillions of dollars in Treasurys and mortgage-backed securities the central bank successfully reduced long-term borrowing costs to drive economic recovery.

The remarks from Powell come as Trump continues to increase his criticism toward Powell and the Fed regarding their monetary policy decisions during the pandemic. Trump has indicated his desire to replace Powell and accused the central bank of triggering inflation while allowing excessive government financial activities. Warsh has repeated these criticisms through media appearances as a Trump supporter and possible Fed successor.

Powell maintained his focus on Fed independence during the speech by explaining his responsibility to intervene during times of crisis. Through his words the institution demonstrated its essential function of managing economic crises while fulfilling its duty to preserve financial stability without political bias.

During his 50-year Princeton University graduation anniversary Powell used a careful message to promote public service alongside democratic institutions while affirming that pandemic measures were necessary to prevent a major economic breakdown.