Economist Mohamed El-Erian Calls Powell Resignation To Preserve Fed Independence

Mohamed El-Erian, president of Queen's College at Cambridge University and chief economic advisor at Allianz, has publicly called for Federal Reserve Chair Jerome Powell to resign to preserve the Fed's operational independence amid growing political pressures. El-Erian argues that Powell stepping down would be preferable to enduring what he describes as escalating threats to the Fed's autonomy, especially given recent criticisms from President Donald Trump and Treasury Secretary Scott Bessent, who accused the Fed of 'mission creep' beyond its core monetary policy role. While El-Erian acknowledges that his view contrasts with the prevailing Wall Street consensus favoring Powell's continuation until his term ends in May 2026, he sees resignation as a strategic move to protect the institution's credibility. The call follows warnings from former Fed chairs Ben Bernanke and Janet Yellen about the risks of political interference and underscores concerns that Trump's tariff policies and geopolitical tensions complicate the Fed's monetary decisions. El-Erian also noted that most candidates suggested to succeed Powell could ease market concerns, highlighting the importance of selecting a successor committed to maintaining Fed independence. These developments highlight the increasing tension between the Fed and the Trump administration over monetary policy direction and institutional boundaries.