Federal Reserve Chair Jerome Powell stood firmly behind the central bank’s actions during the Covid-19 pandemic in a speech delivered Sunday at Princeton University, where he also lauded the dedication of government employees and the value of American higher education—both areas recently targeted by the Trump administration.
Speaking at a baccalaureate service ahead of Tuesday’s commencement, Powell reflected on his own connection to Princeton, marking 50 years since his graduation. He highlighted the Federal Reserve’s rapid response to the economic fallout caused by the pandemic, including its decision to cut the benchmark interest rate to nearly zero and to launch a large-scale asset purchase program. This program involved buying trillions of dollars in Treasury bonds and mortgage-backed securities to maintain low long-term interest rates.
“With little warning, economies around the world came to a hard stop,” Powell said. “The possibility of a long, severe, global depression was staring us in the face. Everyone turned to the government, and to the Federal Reserve in particular, as a key first responder.”
Powell paid special tribute to the Fed’s career civil servants, crediting their experience in previous crises for helping steer the institution through the pandemic. “Career civil servants at the Fed who are veterans of previous crises stepped forward and said, ‘We got this,’” he remarked.
The Fed chair’s remarks come amid ongoing criticism from President Donald Trump, who has repeatedly attacked Powell for maintaining steady interest rates this year after three cuts in late 2024. Trump has dismissed inflation concerns and urged the Fed to reduce borrowing costs further. Earlier this month, Trump called Powell a “fool” for not cutting rates and last week dubbed him “Too Late Powell.” Powell has not publicly responded to these attacks, which have resonated with some Republicans on Capitol Hill.
In addition to defending the Fed’s pandemic strategy, Powell took aim at recent federal actions against American universities. Several Ivy League institutions, including Princeton, have seen research funding reductions under the Trump administration. “Our great universities are the envy of the world and a crucial national asset,” Powell said. “Look around you. I urge you to take none of this for granted.”
Separately, former Fed governor Kevin Warsh, a potential successor to Powell when his term ends in May 2026, has criticized the Fed for allowing inflation to surge to its highest levels in decades during 2022. Speaking at the International Monetary Fund’s spring meetings, Warsh cautioned against the Fed’s expanding size and scope, warning that each intervention leads to more debt and necessitates even more aggressive future actions.
While the Fed does not issue government debt, critics argue that its Treasury bond purchases have indirectly supported increased federal borrowing and spending.
Powell acknowledged that the Fed might have raised interest rates sooner once inflation rose in 2021 but defended the overall pandemic response. “Through the joint efforts of many, we avoided the worst outcomes,” he said. “It is hard to imagine the pressure people face at a time like that. Their collective efforts saved our economy, and the career civil servants involved deserve our respect and gratitude; it is my great honor to serve alongside them.”
