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President of Queens’ College of Cambridge University Mohamed El-Erian speaks during a panel discussion at the headquarters of the International Monetary Fund during the Annual Meetings of the IMF and World Bank in Washington, D.C., on Oct. 13, 2022.
James Lawler Duggan | Reuters
Mohamed El-Erian on Tuesday called for Federal Reserve Chair Jerome Powell to voluntarily relinquish his position in order to ensure the central bank’s independence, making the chief economic advisor at Allianz one of the first prominent economists to publicly take such a position.
“If Chair Powell’s objective is to safeguard the Fed’s operational autonomy (which I deem vital), then he should resign,” El-Erian, , said in a morning post on X.
El-Erian, also president of Queen’s College at Cambridge University, said he was aware that his view did not align with what he saw as Wall Street consensus that wants Powell to serve out the remainder of his term as chairman, which ends in May 2026. The former co-chief investment officer at Pimco acknowledged, however, that Powell’s resignation would not be a “first best” outcome.
But El-Erian said Powell stepping down would be better than the current scenario, in which he said the Fed is facing “growing and broadening threats” to its independence. El-Erian said these threats would likely only increase if Powell remained Fed chair.
El-Erian referenced Treasury Secretary Scott Bessent’s statement that the Fed had suffered from “mission creep” into areas outside of its core monetary policy responsibilities. Bessent told CNBC on Monday that “the entire” Fed should undergo a review.
The statements come as President Donald Trump and his advisers have stepped up their attacks on Powell over the Fed’s decision to hold interest rates steady since December. Powell has said that Trump’s plan for steep tariffs has created economic uncertainty, pushing the bank to keep rates unchanged as it awaits developments. More
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President Trump has placed a 20 percent tariff on goods imported from the country, effective Aug. 1.President Trump is set to meet at the White House on Tuesday with President Ferdinand Marcos Jr. of the Philippines, who is seeking to leverage his country’s close relationship with the United States to secure a more favorable trade deal.Mr. Trump plans to host Mr. Marcos for lunch. The Trump administration fell well short of its goal of securing 90 trade deals in 90 days by early July, negotiating only a handful. The White House says that it has, so far, reached framework agreements with Britain, Vietnam and Indonesia, plus a trade truce that rolled back tariffs with China.Mr. Trump has threatened higher tariffs on dozens of countries as of Aug. 1, including the Philippines, which he said would receive a 20 percent tariff. Many global leaders have been negotiating with the Trump administration in an effort to lower those tariffs further.Before leaving for the United States, Mr. Marcos said his primary goal was to make sure that trade between the two nations was strong.“My top priority for this visit is to push for greater economic engagement, particularly through trade and investment between the Philippines and the United States,” he said. “I intend to convey to President Trump and his cabinet officials that the Philippines is ready to negotiate a bilateral trade deal that will ensure strong, mutually beneficial and future-oriented collaborations that only the United States and the Philippines will be able to take advantage of.”A statement from the White House said the meeting between Mr. Trump and Mr. Marcos would focus on a “shared commitment to upholding a free, open, prosperous and secure Indo-Pacific and advancing shared economic prosperity.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
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