House Democrats Urge Hearing on Fed Independence

In a letter to Chair Hill, the Representatives, including Maxine Waters, Ranking Member of the Financial Services Committee and Brad Sherman, Ranking Member of the Subcommittee on Capital Markets, said the President’s attempts to oust Fed Chair Jerome Powell and target Governor Lisa Cook violated statutory protections and due process requirements. They argued that these actions amounted to an unconstitutional effort to seize control of monetary policy, which Congress designed to be independent of the executive branch. The Representatives warned that such attacks jeopardize the Fed’s ability to rein in inflation, reduce unemployment, and support long-term growth.

The Representatives stressed that weakening the Fed’s independence threatens economic stability, investor confidence, and the global role of the dollar. They cited former Fed Chairs Ben Bernanke and Janet Yellen, who cautioned that political interference would undermine trust, drive up borrowing costs, and destabilize markets. The Representatives also pointed to former Republican leaders Jeb Hensarling and Phil Gramm, who have previously defended Fed independence regardless of who sits on the Board.

The Representatives concluded that Congress must act swiftly to safeguard the separation of powers by protecting the Federal Reserve’s independence from executive overreach.