At a sensitive moment, Powell speaks at the Princeton graduation ceremony: Universities are a vital national asset

Last Sunday, Federal Reserve Chairman Jerome Powell delivered a speech at Princeton University's graduation ceremony, stating that American universities are "vital national assets" and urging students to protect democracy.

This statement comes at a time when the Trump administration has launched a new round of attacks on higher education—banning Harvard University from enrolling international students and cutting billions of dollars in funding for higher education. The escalating tension between Powell and Trump may affect the independence of the Federal Reserve's monetary policy.

At a Sensitive Moment, Powell Emphasizes Universities as Important National Assets

According to the Financial Times on May 26, Powell did not hold back in defending American higher education during his speech at Princeton University's graduation ceremony last week.

"We lead the world in many ways, including scientific innovation and economic vitality. Our outstanding universities are the envy of the world and are vital national assets."

Powell warned Princeton graduates not to take this for granted and called on students to "defend democracy."

"When you look back 50 years from now, you will want to know that you did everything you could to uphold and strengthen our democracy, bringing us closer to the eternal ideals of our founders."

The timing of these remarks is quite sensitive. Last week, the Trump administration banned Harvard University from enrolling international students, marking the latest attack on Ivy League schools, citing alleged leftist indoctrination and anti-Semitism. The government also revoked student visas and demanded that universities provide information on students participating in protests.

The Trump administration has also cut billions of dollars in funding for American higher education institutions, prompting countries like France to offer teaching positions to top scholars currently in the U.S.

Trump vs. Powell

Interestingly, Powell himself has become a target of Trump's "attacks." The Federal Reserve Chairman, appointed during Trump's first term, is now being criticized by the president for not lowering interest rates quickly enough.

Trump has referred to Powell as "Mr. Late" and "a big loser," as the Federal Reserve has kept interest rates between 4.25% and 4.5% this year. Powell and other Federal Reserve officials have stated that they cannot lower rates until they determine that the president's global trade war will not trigger a new wave of sustained inflation in the U.S.

Kevin Hassett, chairman of Trump's Council of Economic Advisers, hinted last month that the government would "continue to explore" ways to fire Powell before his term ends in May next year. However, Trump later stated that he had "no intention" of firing the Federal Reserve Chairman.

Powell has indicated that he intends to serve his full term and believes that being fired due to differences in monetary policy is "legally not permissible." An opinion from the Supreme Court this week indicated that the nine justices believe the White House does not have the authority to interfere with the Federal Reserve's independence in setting monetary policy by firing members of the central bank's rate-setting committee