Sen. Elizabeth Warren (D-MA) is raising concerns after President Donald Trump once again criticized Federal Reserve Chair Jerome Powell and hinted at firing him before the end of his term.
Speaking to CNBC last week, Warren said that while the president cannot legally fire Powell, she wouldn't put anything past Trump. "This is a president who has shown himself willing to violate laws," she said. "If Chairman Powell can be fired by the president of the United States, it will crash the markets."
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Warren Warns of Financial Chaos
Warren, a longtime critic of Powell's decisions on interest rates and regulation, said it's still imperative that the Federal Reserve remain independent. "The infrastructure that keeps this stock market strong…is the idea that the big pieces move independent of the politics," she said. "If the New York Stock Exchange, if interest rates in the United States are subject to a president who just wants to wave his magic wand…then we are no different from a two-bit dictatorship."
Her comments came just hours after Trump on Thursday posted on Truth Social that, "Powell’s termination cannot come fast enough!" Trump accused Powell of being “too late and wrong” on interest rates and blamed him for slowing the economy.
Later that day, Trump doubled down, telling reporters, “I don’t think he’s doing the job. He’s too late, always too late… If I want him out, he’ll be out of there real fast, believe me.”
A Pattern of Pay-to-Play?
Warren also accused Trump of using tariffs to reward allies and donors while hurting competitors. She pointed to Trump's past interactions with Apple AAPL CEO Tim Cook and previous tariff decisions linked to countries where Trump had business interests.
"The problem is, nobody can trust the system," Warren said. "There's no independence, no fairness. It's all, whose palm did you grease?"
In a joint letter to Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, Warren and nearly 50 Senate Democrats criticized the unpredictability and favoritism in Trump's tariff policy. They called for more transparency around companies seeking tariff exemptions.
“We have not built a strong economy in America based on that kind of pay-to-play,” she said.
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Fed Independence Goes Back Generations
Warren explained that the Fed's independence has been essential to American financial stability since the Civil War, when the Office of the Comptroller of the Currency was created in 1863 to ensure the integrity of the banking system during wartime.
She pointed out that, ever since, regulators have been kept financially and politically independent to avoid pressure from elected officials or wealthy donors.
“We need to preserve it not for the politics of the moment, but because overall, that's what keeps the system strong year after year, decade after decade.”
She warned that letting presidents interfere in monetary policy, especially by threatening job security, undermines that entire framework.
Powell has made it known that he does not believe the president has the authority to remove him. His term as Fed chair ends in May 2026.
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