Chicago Fed President backs Powell, warns attacks on central bank independence could trigger inflation rebound.

Chicago Fed President Charles Evans said on Thursday that recent attacks on the Federal Reserve and Chairman Powell are concerning. If the central bank's independence is weakened, it could have a negative impact on inflation prospects. He also pointed out that, given ample evidence of a stable job market, the focus of the central bank should be on reducing inflation, maintaining expectations of a possible rate cut later this year. Evans stated in an interview, "Any actions that violate or attack the independence of the central bank will only make things worse. If attempts are made to strip the central bank of its independence, inflation is likely to reappear." This statement comes after Powell confirmed that he had been summoned by the US Department of Justice for a multi-billion dollar renovation project at the Federal Reserve's headquarters in Washington. The cost overruns of this project have long caused discontent at the White House, and the latest developments are seen as a potential risk of criminal investigation for Powell. Although Evans did not comment on the specific legal issues, he agreed with Powell's previous views that questions surrounding the construction project could be seen as an "excuse" for the president to pressure him on interest rates. "It would be really bad if investigations were to start as a pretext for disagreeing with interest rate decisions. We shouldn't go down that path." President Trump has been sharply and even personally criticizing the Federal Reserve under Powell's leadership, repeatedly calling for significant rate cuts and labeling Powell as "Mr. Too Late." It is worth noting that the Federal Reserve has lowered its benchmark interest rate three times since September 2025. Powell's term as chairman is set to end in May this year, and his term as Federal Reserve Governor could be extended until 2028. Like other Federal Reserve officials, Evans reiterated the importance of central bank independence in achieving price stability and full employment goals. "Indeed, there are some countries that have initiated criminal investigations against their central banks, but those are Zimbabwe, Russia, Turkey, and other countries. You wouldn't call them mature developed economies." Evans also praised Powell's performance during his tenure, calling him a "Hall of Fame-level" Federal Reserve chairman. He believes that Powell has successfully reduced inflation without causing an economic recession.