Why is it that nobody in Corporate America is willing to take a stand for Jay Powell

The Federal Reserve’s Independence Faces New Challenges

Federal Reserve Chair Jerome Powell is often regarded as one of the most composed figures in Washington. However, even he couldn’t ignore the latest claims from the Trump administration regarding the central bank.

The Crucial Role of an Independent Central Bank

It’s widely accepted that a central bank free from political influence is essential for a stable, advanced economy. You don’t need to be an economist to see the consequences—just look at the situations in Turkey or Argentina, where government interference in monetary policy has led to turmoil.

The Federal Reserve, as the United States’ central bank, is often described as the cornerstone of the global financial system. Any attempt by a president to interfere with the Fed is seen as a dangerous move that could trigger instability.

And yet, sometimes it seems like the prevailing attitude is simply: YOLO.

Market and Corporate Reactions to DOJ Subpoena

When news broke that the Justice Department had subpoenaed Chair Powell as part of a criminal probe, financial markets reacted only briefly and mildly. Even among top business leaders, who typically view an independent Fed as essential, there was little visible concern.

In case you missed it: Powell, who has been under constant pressure from President Trump to lower interest rates, announced on Sunday that federal prosecutors were investigating both him and the Fed. The investigation was said to focus on his congressional testimony about cost overruns during the Fed’s headquarters renovation. Powell, however, quickly dismissed this explanation as a mere excuse in a rare Sunday statement, calling the stated reason a “pretext.”

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell stated. “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.”

In essence, while the president is pushing for much lower interest rates to boost economic growth, Powell and his colleagues are tasked with maintaining a balance between growth and stability, regardless of political pressure. Lowering rates too aggressively could risk triggering runaway inflation.

Trump’s Approach to the Fed

President Trump has shown little regard for the traditional wisdom supporting central bank independence. Over the past year, he has repeatedly criticized Powell, tried to remove Fed Governor Lisa Cook, and appointed loyalists to key positions on the Fed’s policy committee.

Behind closed doors, business leaders are “very alarmed” by the administration’s actions against the Fed, according to Jeffrey Sonnenfeld, founder of the Yale Chief Executive Leadership Institute.

Business Leaders’ Silent Concerns

Sonnenfeld’s research found that 71% of 200 surveyed CEOs believe the Trump administration has weakened the Fed’s independence, and 80% said the president’s efforts to pressure Powell were not in the country’s best interest. These opinions were recorded even before the DOJ’s investigation into Powell became public.

Despite these concerns, there has been no public outcry from major corporations, trade associations, or CEOs, even though the Fed’s decisions on interest rates directly impact their operations.

The Business Roundtable, which represents the heads of America’s largest companies, declined to comment.

Sonnenfeld cited Harley-Davidson’s experience in 2018 as an example. When the company moved some production abroad in response to EU tariffs, President Trump called for a boycott, which hurt the company and ultimately led to the CEO’s dismissal. “It was pure retaliation… CEOs don’t want to be in that position. There’s little incentive to speak out individually. Collective action is needed to make an impact,” Sonnenfeld explained.

Private Influence and Strategic Silence

Some CEOs have chosen to try to influence the president behind the scenes, using personal relationships and private channels. Earlier this year, the leaders of Walmart, Target, and Home Depot publicly warned about the negative effects of tariffs on supply chains and were invited to the White House to discuss the real-world consequences of these policies.

Others may be relying on the belief that “Trump always chickens out” when it comes to his most extreme ideas—a strategy known as the “TACO” trade. Why risk becoming a target if the controversy might soon pass, allowing them to take advantage of market dips?

There’s also a more cynical perspective: many business leaders, like investors, are so eager for lower interest rates that they’re willing to accept risks to the nation’s long-term stability.

Changing Priorities at the Fed

For years, the Federal Reserve’s decisions on interest rates were guided primarily by economic data. That era has ended, according to Erasmus Kersting, an economics professor at Villanova University.

“This doesn’t necessarily mean disaster,” Kersting wrote in an email. “It just means that the president’s preferences now carry much more weight. That’s why, even now, the level of concern among business leaders and Wall Street remains muted: many market participants actually agree with Trump’s instincts.”