The Economics Show How the Fed fights back, with Don Kohn
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Jan 14, 2026 
Don Kohn, a former vice-chair of the Federal Reserve and now a senior fellow at the Brookings Institution, discusses the alarming criminal probe into current Fed chair Jay Powell, calling it an unprecedented attack on Fed independence. Kohn examines Powell's strong response and the potential political fallout. He explores the dynamics of new Fed leadership, warning against politicization. Kohn also talks about the implications of AI on productivity and inflation, emphasizing the need for data-driven leadership to preserve the integrity of the Fed.
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Grave Threat To Fed Independence
- The DOJ probe into Jay Powell is the most serious attack on Fed independence in Don Kohn's experience.
- He warns the Trump administration will stop at nothing to control the Fed if unchecked.
Respond Publicly To Intimidation
- Powell's candid public response was constructive and served as a warning shot to the administration.
- Other Fed figures and members of Congress should publicly defend institutional independence when it's threatened.
Legal Safeguards Underpin Fed Autonomy
- Congress built legal protections into the Fed to shield it from short-term political pressure.
- Fixed terms, budgetary independence and the structure of the Reserve Banks are core to that protection.