More recently, Mohamed El-Erian, Chief Economic Advisor at Allianz, has joined calls for the resignation of Federal Reserve Chair Jerome Powell. He thinks Powell’s soon-to-be-voluntary departure will be important to maintaining distance between the central bank and political machinations. El-Erian, who serves as the president of Queen’s College at Cambridge University, made his remarks in a post on X, marking one of the first instances of a prominent economist taking a public stance on Powell’s leadership.
El-Erian’s public call for Powell to resign represents a complete break from the prevailing Wall Street consensus. This would unite almost all powerful Wall Street supporting analysts and economists in favor of Powell finishing out his term. His current term expires May 2026. This sharp divergence in opinion signifies a rift within economic establishments over what the future of the Federal Reserve should look like.
This was almost a footnote in El-Erian’s post, but I want to call attention to it. He stated, “If Chair Powell’s objective is to safeguard the Fed’s operational autonomy (which I deem vital), then he should resign.” His comments come amid increasing scrutiny of Powell’s decisions as chair, particularly concerning the Federal Reserve’s approach to interest rates and economic policy.
Jerome Powell has been the target of much righteous wrath these days. Most of that is due to his management of economic uncertainty created by President Donald Trump’s suggested very large tariffs. Powell acknowledged that these tariffs have generated instability in the economy, contributing to the Fed’s decision to keep interest rates unchanged since December. This decision has been widely criticized by Trump and his advisers, who have escalated their attacks on Powell.
Familial discussions regarding the Federal Reserve’s future are not unusual. El-Erian’s comments shine a light on an important discussion about the role of politics and central bank independence. The possible effects of Powell’s style of leadership on the future of monetary policy are still a concern for economists and investors.