Powell's silence reflects an attentiveness to keeping the Fed from getting dragged further onto the battlefield of national politics
Federal Reserve Chairman Jerome Powell is seen walking in Grand Teton National Park on August 22, 2025 near Jackson Hole, Wyoming. (Natalie Behring/Getty Images)
Federal Reserve Chair Jerome Powell's final speech at the annual Jackson Hole economic summit was heavy on economic statistics and light on the lingering threats to the central bank's independence from President Donald Trump. In fact, he left it unsaid.
Powell has faced an extraordinary barrage of attacks — personal and otherwise — from Trump, who has sought a drastic reduction in interest rates to boost the U.S. economy. Yet Powell's silence on the conflict reflects an attentiveness to keep the Fed from getting dragged onto the battlefield of national politics, observers say.
"In part this is Powell's style and it's the institution's decision to be less confrontational," said Gary Richardson, an ex-historian of the Fed who's now a professor at the University of California, Irvine. "They decided to be non-confrontational and this has been a strategy of the Fed for a long time."
Powell did open the door to a September rate cut, which in theory could cool Trump's temper against the Fed. He said the "balance of risks" had started shifting in a way that might "warrant adjusting our policy stance." Still, he was strenuous in emphasizing that any decision to cut rates would be solely driven by economic considerations and nothing else.
"[Fed members] will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks," he said Friday. "We will never deviate from that approach."
Where Trump has been relentless in assailing Powell, the Fed chief has focused the brunt of his efforts attempting to steer borrowing costs without tilting the scales of politics. Notably, he did correct Trump on live television when the president misstated the cost of the ongoing renovation of the Fed's headquarters.
The Fed chief also gently addressed Trump's non-stop criticisms briefly last month. He was asked about it at a news conference following the Fed's decision to leave borrowing costs unchanged. Powell's answer mentioned a longstanding tradition that separates the central bank from day-to-day politics, and he said he believes it's functioned well.
"I think that an independent central bank has been an arrangement that has served the public well, and as long as it serves the public well it should continue and be respected," Powell said. "What it gives us is the ability to make these very challenging decisions in ways that are focused on data... and not political factors."
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