President Trump floated the idea of firing Jerome Powell — whom he first appointed Federal Reserve chair — earlier this week, after years of on-and-off criticism over interest rates.

J.P. Morgan warned in a note that Trump's pressure on the Federal Reserve and threats to fire Chair Powell could undercut central bank independence and increase inflation risks.

AP reporter Chris Rugaber explains the role of the Federal Reserve and why an independent Fed is important. (AP video: River Zhang)