As the Federal Reserve facing unprecedented attacks from the Trump administration,
Senator Elizabeth Warren (D-Mass.)
is likely to defend the central bank in a speech on Wednesday, becoming an unexpected friend. Why it's important Not even one of Jerome Powell's harshest and most ardent detractors is endorsing the White House's justification for his dismissal. The unusual backing for the organization from Warren, a prominent Democrat on the Senate Banking Committee, suggests how Democrats would react to pressure from the White House to remove Powell.
What she's saying: "Trump and his Republican allies in Congress suddenly decided to scrutinize how much the Fed is spending on building renovations after Trump's initial attempts to intimidate Powell failed," Warren will say to a group of economists and financial policymakers at the Exchequer Club in Washington, D.C. In the speech, which Axios was the first to get, Warren admits the irony of standing up for a system she has long opposed.
She will harshly criticize Trump's economic plans while stating, "Independence doesn't mean immunity from accountability, and I've long pushed for more transparency and oversight at the Fed." To be clear, however, no president should be stupid enough to dismiss Powell on the basis of this. Should he do so, the markets will collapse. The broader picture: The Trump administration and some Republicans have recently accused the Fed of being excessively ostentatious and expensive in its headquarters renovations. Trump made the legally dubious suggestion on Tuesday that Powell may be fired because to the renovation problem.
Flashback: In an attempt to strengthen central bank control, Warren and Florida Republican Senator Rick Scott co-sponsored a bill a few weeks ago that would need Senate approval for the Fed's internal watchdog. Warren has referred to Powell as a "dangerous man" and has long opposed the Fed's banking policies. When President Biden renominated him in 2021, she was one of the few lawmakers who voted against his confirmation in 2017.
"Look, he shouldn't be the Federal Reserve's chair, in my opinion. During an appearance on NBC's Meet the Press in 2023, Warren stated, "I've told everyone—I've said that publicly in every way I know how." Senator Bernie Moreno (R-Ohio), meanwhile, is providing some Senate backing for President Trump's continuous criticism of Powell. Why this matters: Moreno's remarks imply that if Powell is fired, his successor may need to engage in negotiations on important topics like interest rates and tariffs, even if the majority of Senate Republicans have supported Powell and the Fed's independence.