Senator Elizabeth Warren is defending the Federal Reserve Chair Jerome Powell, after years of being called corrupt, reckless, and dangerous.
In 2025, with President Donald Trump back to Oval, Warren was coming in to protect Powell from Trump's attacks, despite the fact that he spent many years trying to get him out of work.
Warren once accused Powell for weakening bank regulations and doing the entire financial system “not so safe.” She is Says There was a “culture of corruption” in the Fed after leading officials resigned in incorrect trading. He hated his refusal to cut interest rates and call him whenever he could.
But now that Trump is targeting Powell, Warren is moving to the side – not because he suddenly confesses to Powell, but because he doesn't trust Trump to keep political neutral. And hey, a enemy of his enemy can be his frenemy somehow, right?
Warren said Trump's threats to burn Powell could break the markets
This change came after Trump posted in the fact that social that Powell's “termination could not come quickly!” Trump floated the idea of removing Powell in his first term but that -backing off after the market shock. So we are essentially in a loop.
Treasury Secretary Scott Bescent tried to calm things down, which Trump said that might mean “Terminus” differently, but Trump said he had no “desire” to shoot powell before May 2026, when his term ended.
However, the threat is outside. Warren, who leads Democrats on the committee who oversees financial agencies, Powell said it was not perfect but he would maintain politics in Fed's decisions.
“I do not agree with Powell on both the financial and regulation policy,” Warren said this week, “but I respect how he manages politics.” He said Powell was listening to all sides but making his own decisions. “That is just as it should be.”
Warren and Powell barely spoke privately for years. He beat him at interest rates and financial regulations. But now, even though he still likes lower borrowing costs – like Trump – he says their methods are quite different.
“I have no authority to do the fed to do anything,” Warren said. “All I can do is try to persuade, and that's what I'm trying to do. Donald Trump isn't trying to make an argument of persuasion. He threatens when he says that if he wants Jay Powell to leave, Jay Powell will be gone.”
He warned Powell's removal would drag the fed to the political disturbance
Warren warned that Trump's pushing into the fire Powell could cause serious problems in the market. He taught how investors responded to previous comments on Trump's trade.
In one case, he said, the capital did not run into US government bonds as it usually does in a crisis. “In a moment of excitement, flying towards safety did not reach the US bond market,” he said. “It went to other countries. That was a sad moment for our country.”
He said Fed's role was more than setting rates. It also controls the banks, and there Warren is always focusing on his fight. He said letting politicians control the bank regulation would ruin the stability of financial markets.
He noted that this idea of freedom for regulators returned to 1863. “Congress returned in 1863 who understood that if politicians could shorten or enhance the binding regulators through the provision process, then no one could rely on a group of decision makers who were just thinking about the safety and security of the system,” Warren said.
He said Trump was trying to remove Powell and would drag the fed into politics. “If Donald Trump tried to burn the Fed leader, he was trying to drop banking regulation in political stew, and the financial policy and regulatory decisions made under those situations would not support markets for a long time,” he said.
There is also a legal fight that occurs. The Supreme Court checks whether agencies such as Fed can remain completely independent. Some legal experts think that the court may divide its authority, allowing the president to control financial policies but not interest rates. But, “nothing like that, you're half independent,” Warren said.
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