Federal Reserve Board Chairman Jerome Powell speaks during a press conference following a Federal Open Market Committee (FOMC) meeting on December 10, 2025 in Washington, DC
Saul Loeb | AFP | Getty Images
Federal Reserve Chairman Jerome Powell made his first statement on Wednesday about his controversial decision to attend Fed Governor Lisa Cook’s Supreme Court hearing, expressing belief that it is the most important legal battle the central bank has ever faced because of its impact on independence.
“This case is perhaps the most important legal case in the 113-year history of the Fed,” Powell said Wednesday during his post-Fed meeting news conference. “When I thought about it, I thought it might be difficult to explain why I wasn’t there.”
Last week, Powell took part in opening arguments in the case over whether President Donald Trump can fire Cook, a decision that many believe has far-reaching implications for whether a president can remove central bank officials to essentially seize control. Treasury Secretary Scott Bessent called Powell’s decision to attend the event a “mistake” in an interview with CNBC last week and said the Fed chair had politicized the case.
Powell also noted that former Fed Chairman Paul Volcker “famously” went to the Supreme Court for a case. That shows Powell that there is a precedent for his participation, he said.
According to the bank’s website, the Federal Reserve was founded in 1913 under President Woodrow Wilson.
During the hearing, Supreme Court justices appeared skeptical of Trump’s claims that he had the power to remove Cook and expressed concerns about what such a precedent would mean for the Fed’s independence.
Trump has cited mortgage fraud allegations in his attempt to remove Cook from office, but critics said the move appeared to be tied to his push for lower interest rates. The Supreme Court had previously allowed Cook to remain in her role until the hearing.
Powell’s presence followed his revelation earlier this month that he was facing a federal investigation over renovations to the Fed’s headquarters. Politicians and monetary policy observers have linked the investigation to Trump’s repeated criticism of Powell for not cutting interest rates more quickly.
The criminal investigation into Powell and the attempted ouster of Cook have combined to raise concerns that the Fed’s longstanding apolitical stance is at risk.
Powell said during Wednesday’s press conference that the Fed’s political separation is key to securing its long-term credibility.
“The point of independence is not to protect policymakers or anything like that,” Powell said. “It just so happens that every advanced economy (and) democracy in the world has moved to this common practice.”
Losing that separation, he said, “would make it difficult to restore the credibility of the institution.”
The prevailing sentiment over Wednesday’s news conference was that Trump could at any time announce a successor to Powell, whose term as chairman ends in May. Powell offered some timely advice for whoever takes on the role next.
“Don’t get drawn into elected politics,” Powell said. “Don’t do it.”