Senior central bank leaders from around the world have publicly expressed support for US Federal Reserve Chair Jerome Powell after the United States launched a criminal investigation into him. The joint statement emphasizes the importance of central bank independence and warns against political pressure in monetary policy decisions.
Leaders from major financial institutions, including the Bank of England, the European Central Bank, and the Bank of Canada, are among eleven top officials who signed the statement. They stressed that interest rate decisions must remain free from political influence to protect economic stability.
In their message, the central bankers praised Powell’s record, stating that he has served with honesty, stayed focused on his mandate, and acted in the public interest throughout his tenure.
Background of the Investigation
The US Department of Justice is conducting the investigation, which is linked to testimony Powell gave before a Senate committee. The testimony concerned renovations to Federal Reserve buildings.
President Donald Trump has denied having any knowledge of the probe. However, the investigation follows a year of frequent public criticism from Trump, who has repeatedly pressured the Federal Reserve to cut interest rates more aggressively.
Trump has not only challenged Powell’s policy decisions but has also made personal remarks about him, including insults aimed at his leadership.
Powell Breaks His Silence
Until recently, Powell avoided responding publicly to the criticism. On Sunday, he addressed the issue directly, warning that the independence of the Federal Reserve was under threat.
He said the situation raises a serious question about whether interest rates will continue to be set based on data and economic conditions, or whether political pressure and intimidation will begin to shape monetary policy.
Interest Rates and Inflation Concerns
Since September, the Federal Reserve has lowered interest rates three times. The main lending rate now stands at roughly 3.6 percent. Despite these cuts, policymakers remain divided.
Some officials fear that further reductions could increase inflation, which remains above the Fed’s target. Official data released on Tuesday showed consumer prices rose 2.7 percent in the year to December, unchanged from November and still higher than the central bank’s 2 percent goal.
Global Warning on Central Bank Independence
In their joint statement released Tuesday, the international financial leaders said central bank independence is essential for price stability, financial security, and long term economic health.
They added that protecting this independence must go hand in hand with respect for the rule of law and democratic accountability.
Political Fallout in the US
Powell, who was nominated by Trump in 2017, is scheduled to step down in May. Trump is expected to announce a successor soon.
Several Republican lawmakers have criticized the Justice Department’s move. Senator Thom Tillis of North Carolina said he would block approval of Powell’s replacement until the matter is fully resolved. Since the Senate Banking Committee must approve the next nominee, this stance could delay the process.
Another committee member, Senator Kevin Cramer, said he disagrees with Powell’s leadership but does not believe he committed a crime. He called for a fast investigation to restore confidence.
Senator Lisa Murkowski described the probe as an attempt to apply pressure on the Federal Reserve.
Support From Former Fed Chairs
Powell has also received strong backing from three former Federal Reserve chairs: Janet Yellen, Ben Bernanke, and Alan Greenspan.
Yellen warned that the investigation could seriously harm investor confidence. She said political interference in monetary policy risks pushing the country toward instability and undermines trust in financial institutions.
Full List of Signatories
The statement was signed by:
Andrew Bailey, Bank of England
Christine Lagarde, European Central Bank
Erik Thedéen, Sveriges Riksbank
Christian Kettel Thomsen, Danmarks Nationalbank
Martin Schlegel, Swiss National Bank
Michele Bullock, Reserve Bank of Australia
Tiff Macklem, Bank of Canada
Chang Yong Rhee, Bank of Korea
Gabriel Galípolo, Banco Central do Brasil
François Villeroy de Galhau, Bank for International Settlements
Pablo Hernández de Cos, Bank for International Settlements
