Some of the biggest names on Wall Street are getting louder about the importance of an independent Federal Reserve as the White House pressure on Jerome Powell intensifies.
JPMorgan Chase (JPM) CEO Jamie Dimon, Bank of America (BAC) CEO Brian Moynihan, Citigroup (C) CEO Jane Fraser, and Goldman Sachs (GS) CEO David Solomon and Carlyle Group co-founder David Rubenstein all offered separate arguments this week about why it was so critical to financial markets for the central bank to operate autonomously.
“Fed independence is very important, and it’s something we should fight to preserve,” Solomon told CNBC on Wednesday.
The stability of the US “is actually necessary and important to the whole world,” Moynihan added in a separate interview with CNBC on Wednesday, and he said, “I think a stable Fed, an independent Fed, is key to that.”
“In a year, we’ll have a new Fed chair, because that’s the right of the president,” he added, referring to the fact that Powell’s term expires next May. “But I think if … the market would really look at a change prematurely as being something very different.”
“The Federal Reserve is really the crown jewel of the governmental system in many ways because it’s seen as very independent and very merit-oriented,” Carlyle Group co-founder David Rubenstein said Thursday on Yahoo Finance’s Opening Bid.
“I think overall it would be a good thing for the country to have a strong Fed chair succeed Jay Powell rather than a weak Fed chair,” Rubenstein added.
Investors did, in fact, react negatively on Wednesday to multiple reports that Trump was close to firing Powell. Longer-term Treasury yields rose and the dollar dropped before Trump told reporters that he was “not planning” to fire Powell.
Trump left the door open to that possibility, however. “I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud,” he said.
Citigroup’s Fraser was among the other big bank executives to make her views known publicly this week.
In a statement shared with Yahoo Finance and other media outlets, she said that “the independence of the Federal Reserve drives its credibility. It is critical to the effectiveness of our capital markets and U.S. competitiveness.”
But the CEO who first weighed in this week was JPMorgan’s Dimon, someone with a lot of sway on Wall Street and in Washington. In April, Trump acknowledged listening to Dimon before pulling back on his “Liberation Day” tariffs, which triggered widespread market chaos.
Dimon told reporters Tuesday that the independence of the Federal Reserve is “absolutely critical” for Powell and whoever succeeds him as chairman of the central bank.
“Playing around with the Fed can often have adverse consequences,” Dimon said after JPMorgan reported its first quarter earnings, adding that it can produce “the absolute opposite of what you may be hoping for.”
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. His email is david.hollerith@yahoofinance.com.
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