Why was former Federal Reserve chair Jerome Powell able to stand up to President Donald Trump when so many others capitulated — and what are the lessons for other government officials, including Powell’s successor, Kevin Warsh?
Powell’s core strength was his refusal to negotiate on matters of principle. You might call it “The Art of No Deal.” Regardless of the pressure, he wouldn’t compromise the Fed’s power to set monetary policy. Trump threatened repeatedly to fire him, launched a criminal investigation against him and ceaselessly attacked him. Powell took the pounding, but he didn’t budge.
We like to celebrate “profiles in courage” in Washington, but we don’t see them very often. Public officials these days perpetually criticize their political enemies, which costs them nothing. Rarely do they take on people on their own side. That’s what makes Powell so unusual. A Republican nominated in late 2017 by Trump, Powell would not comply with his patron’s improper demands.
Powell’s “High Noon” moment came Friday, Jan. 9, 2026, when he was in Florida relaxing with his wife. He learned that the Fed was subpoenaed in a Justice Department criminal investigation of his supposed management of Fed building renovations. Rather than seek an escape from prosecution, Powell flew back to Washington to record a defiant response in the Fed’s television studio.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said. “Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do.”
By broadcasting his resolve, Powell drew a red line. Trump continued to rant, made new threats and escalated his pressure campaign. But Wall Street and some courageous Republican senators backed Powell’s insistence that Trump drop the criminal investigation as the price of confirming Warsh as the next Fed chair.
Powell won the Fed war. The Justice Department announced in April that the investigation was closed, and Warsh was confirmed in May as his successor. After 14 years at the Fed, Powell had been planning to leave when his chairmanship ended, but he will continue “for a period of time to be determined” as a Fed governor, with a term ending in 2028, to make sure the Fed is “returning to a traditional model of working with the people that you have and bringing them to consensus,” he said at an April news conference. Meaning: He’ll remain on Trump watch until he feels it’s safe to go.
“None of us has the luxury of choosing our challenges,” he has explained. “Our job is to meet the tests we are presented.”
Where did Powell get his grit? It’s the opposite of a frontier drama. He was a graduate of Georgetown Prep, Princeton and Georgetown Law, then a Wall Street banker, a Treasury Department undersecretary and a private equity dealmaker.
In all these roles he was gracious and quietly competent. Where Trump reveled in the role of billionaire tycoon, the conscientious Powell had actually made billions for his partners and clients. Trump boasts about his golf game, but friends say Powell is actually a scratch golfer.
It fell to Powell to wage the decisive battle for Fed independence. Presidents have been battling the central bank for nearly two centuries, campaigning for low interest rates no matter the inflationary cost. President Harry S. Truman called the Fed chair a “traitor” and wanted to fire him in the 1950s because he wouldn’t bend policy to accommodate Korean War spending. President Lyndon B. Johnson wanted to fire his Fed chair, too. But they both backed off when advised that such an intervention would be illegal. Trump didn’t, and if Powell hadn’t stood firm, the president might have destroyed the Fed’s credibility, a unique American asset.
When Powell became a Fed governor in 2012, he didn’t know much about central banking. He complained that the senior economists of the Fed staff “talk to me like I’m a golden retriever,” according to Wall Street Journal Fed reporter Nick Timiraos’s 2022 book, “Trillion Dollar Triage,” the closest thing to a Powell biography. But Powell immersed himself in the details, reading the transcripts of past meetings and studying the mysteries of monetary policy.
Powell was a centrist on the Fed Board of Governors, neither hawk nor dove on inflation. When Trump took office in 2017, he wanted a Republican as chair and was convinced by Treasury Secretary Steven Mnuchin that Powell would be a reliable ally. “You’re gonna do what you think is right, so I think it’s gonna be great,” he said in nominating Powell in November 2017. Translation: Do what I want, or else.
When the Fed began raising rates in 2018, Trump got angry. “He was supposed to be a low-interest-rate guy. It’s turned out that he’s not,” he complained to the Wall Street Journal. Trump’s attacks got nastier, but that only deepened Powell’s determination to stand his ground. He told Timiraos in 2018, “I’d rather go in the books as a terrible Fed chair than as somebody who knuckled under.”
When Trump returned to the White House in 2025, Powell knew what to expect. Timiraos summarizes his four rules: Don’t talk about Trump. Don’t respond to his criticisms. Stay out of politics. And make friends in Congress and the business community.
But being forewarned, in this case, wasn’t the same as forearmed.
Trump lashed Powell a week after taking office in January 2025, posting that he had done “a terrible job” and “failed” to curb inflation.
The president repeatedly urged the Fed to cut rates, and by April he thundered that “Powell’s termination cannot come fast enough!” Flush with his new power, Trump apparently thought it would be easy. “If I want him out, he’ll be out of there real fast, believe me.”
Powell’s response was mild-mannered but unbending: “People can say whatever they want. That’s fine.” Then Trump gave him a perverse gift with the criminal investigation. Sen. Thom Tillis (R-North Carolina) and other key Republicans indicated they wouldn’t confirm a new chair until the investigation was closed. When it became obvious in April that he couldn’t win, Trump caved.
Warsh’s challenge now will be to maintain the independence that Powell fought so hard to protect. Wall Street was worried in the first few months by reports Trump was talking regularly with his new Fed chair and urging rate cuts. But Warsh calmed fears last month in Jackson Hole, Wyoming, pledging: “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”
The lesson here is obvious, except perhaps to Trump. The more the president pressured Powell to leave, the more resolute he became about staying. As he had told a reporter in 2019, “I will never, ever, ever leave this job voluntarily until my term ends under any circumstances. None whatsoever.” Trump didn’t get the message. He was beating his head against a concrete wall cloaked in a gray flannel suit.
correctionA previous version misstated what former Fed chairman Jerome Powell has said about how long he plans to remain on the Federal Reserve board.
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