Powell Defends Fed in Princeton Speech Against Trump’s Attacks

Federal Reserve Chair Jerome Powell defended the central bank’s response to the COVID-19 pandemic during a speech at Princeton University.

Trump has subjected Powell to a stream of attacks for several months because the Fed has kept its key rate unchanged this year. Photo: The United States Federal Reserve Flickr

In the same speech, he also praised government employees and U.S. universities—both of which have been targeted by the Trump administration, Christopher Rugaber reported for the Associated Press (AP).

Powell and the central bank have faced extensive criticism in recent weeks from President Donald Trump and a potential successor, former Fed Governor Kevin Warsh.

Speaking at a baccalaureate service, Powell—who noted he graduated from Princeton 50 years ago—specifically defended the Fed’s decision to cut its key interest rate to nearly zero in response to the pandemic.

The Fed also launched an asset-purchase program that involved buying trillions of dollars in Treasury bonds and mortgage-backed securities, intended to keep longer-term interest rates low.

“With little warning, economies around the world came to a hard stop,” Powell said, referring to the pandemic.

“The possibility of a long, severe global depression was staring us in the face. Everyone turned to the government, and to the Federal Reserve in particular, as a key first responder.”

Powell also praised longtime government employees: “Career civil servants at the Fed who are veterans of previous crises stepped forward and said, ‘We got this,’” he said.

Trump has subjected Powell to a stream of attacks for several months because the Fed has kept its key rate unchanged this year, after cutting it three times at the end of 2024.

Trump has argued that there is “no inflation,” and therefore the Fed should reduce borrowing costs.