The administration's investigation into Powell drew condemnation from former Fed chiefs and criticism from key members of the Republican Party this week.
"Everyone we know believes in Fed independence," JPMorgan CEO Jamie Dimon told reporters.
"This is probably not a great idea and in my view, it will have the reverse consequences of raising inflation expectations and probably increase rates over time."
Dimon, one of the most influential figures in corporate America, said Fed independence was "absolutely critical" in 2025.
Bank of America CEO Brian Moynihan told CNBC that an independent Fed provides an anchor for economic success in the United States.
"If you think about the US economy, you think about the strength of this country, you think about us leading the world across all dimensions. One of the important parts that is to have an independent Fed who will then set interest rate policies based on what they see," he said.
An "independent Fed provides an anchor in this country to a success that I think all of us believe in, and you see it as…markets reflect that," Moynihan said.
BNY CEO Robin Vince also warned of negative consequences of eroding Fed independence on Tuesday.
"Independent central banks with the ability to independently set monetary policy in the long term interests of the nation is a pretty well established thing that we've seen all around the world over a very long period of time," Vince told reporters on a call.
"Let's not shake the foundation of the bond market and potentially do something that could cause interest rates to actually get pushed up because somehow there's lack of confidence in the Fed's independence," Vince said.
Powell revealed late on Sunday the Fed had received subpoenas from the US Justice Department, which he called a "pretext" to win presidential influence over interest rates. The US administration's criminal probe is formally about the renovation of the Fed's headquarters.
Central bankers worry that political influence over the Fed would undermine confidence in the bank's commitment to its inflation target, risk higher inflation and fuel volatility in global financial markets.
"Loss of Fed independence tends to lead to steeper yield curves and other damage to ongoing economic dynamism," JPMorgan's finance chief, Jeremy Barnum, said.
"The larger question is damage to American economic prospects and, frankly, global economic stability."
Trump has demanded the Fed slash rates since resuming office in 2025, blaming its policies for holding back the economy and publicly musing about firing Powell, despite legal protections that ostensibly shield the Fed chair from removal.
While Powell's term as chair ends in May, he has the right to remain on the Fed board until January 31, 2028, denying the president another Fed appointment that would otherwise be Trump's fourth on the seven-member board until near the end of his term.
