Amna Nawaz:
Presidents of both parties have largely respected the Fed’s independence, but Trump has long complained about the independent federal agency and its chairman, Jerome Powell, for not cutting interest rates.
Board governors serve for a 14-year term. And in a statement today, the Fed confirmed they may be — quote — “removed by the president only for cause,” also writing that the lengthy terms are — quote — “a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis and the long-term interests of the American people.”
With Lisa Cook’s attempted firing, opponents of the move worry it could further erode the Fed’s independence in a political battle for its control.
For more, we’re joined now by two guests who know a great deal about the Fed. Lael Brainard was vice chair of the Federal Reserve Board of Governors and a member of the board from 2014 to 2023. She also served as undersecretary of the treasury for international affairs under President Obama, among other roles.
And David Wessel is senior fellow in economic studies and the director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
And just a note. We did invite Bill Pulte to join us on the program, but the Trump administration declined.
In the meantime, welcome to you both, and thanks for joining us.
Lael, I will start with you.
You were at the Fed for nearly a decade, most recently under still-chairman Jay Powell. How are he and other board governors looking at this moment, the standoff now between Lisa Cook and President Trump, and what does it mean for how they do their work?