Odd Lots · Tuesday, September 1, 2026
Adam Posen distinguishes between healthy criticism of the Fed and outright political interference, calling threats to remove Fed governors or alter the Fed's mandate 'outrageous and arguably criminal.' He emphasizes the importance of the Fed's independence to maintain credibility in selling U.S. debt and warns against caving to fiscal pressure.
“So a certain amount of, not like President Trump tweeting the Fed chair is an enemy of the state, not using lawfare to go after Lisa, Governor Cook, or now Governor Powell. I mean, that's outrageous and arguably criminal.”
“But certain amount of carping about the central bank, that's fine. Where the rubber hits the road is partly what you said, which is when does the government treasury secretary or president who's trying to sell U.S. bonds say, you have to help me sell U.S. bonds, whether or not inflation's high.”
“And that gets us into the potential really big situation now. But the second thing, and this is the part that was really unprecedented under Trump besides the individual illegal attacks on individual members, is they were, and this was very loud last year, they were threatening to take away the votes of some of the Reserve Bank presidents or quickly turn over the Reserve Bank presidents, not get rid of them and put in their own political appointees rather than having the staggered terms as intended.”