Global Central Bank Chiefs Unite in Support of Fed's Powell
Central bank leaders from across the world have issued a powerful statement of support for Federal Reserve Chair Jerome Powell. This comes after United States authorities threatened the 72-year-old banker with a criminal indictment. The heads of major institutions including the Bank of England, the European Central Bank, and the Bank of Canada joined this collective action.
Rare Joint Statement Defends Powell's Integrity
Eleven senior bankers signed the rare joint statement, which the BBC obtained. They emphasized the crucial importance of maintaining independence when setting interest rates. The bankers declared their full solidarity with Powell during this challenging period.
"Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest," the statement reads clearly. The global central bankers added further praise, stating "To us, he is a respected colleague who is held in the highest regard by all who have worked with him."
Trump Claims Ignorance About Investigation
Meanwhile, President Donald Trump released his own statement regarding the situation. He noted that he did not "know anything" about the probe against Powell. The Department of Justice is reportedly conducting this investigation.
Federal prosecutors in Washington DC opened the probe against Powell. According to the New York Times, they are focusing on the Federal Reserve's long-running headquarters renovation. Investigators are examining whether Powell made misleading statements to Congress about the project's scale and cost.
Year-Long Pattern of Attacks Preceded Investigation
The investigation follows a full year of repeated attacks on Powell by President Trump. Beyond criticizing Powell's decisions on interest rates, Trump has made numerous personal remarks. The BBC reported that Trump called the Fed chair a "major loser" and a "numbskull" on multiple occasions.
Independence from government influence represents a key principle of modern central banking. Financial experts consider this independence critical for preserving financial stability and maintaining public trust. This practice has remained the unquestioned standard for the world's largest financial institutions for decades.
Central Bankers Warn Against Political Interference
The US inquiry into Powell has already faced intense criticism from the financial world. Reuters reported that even some key members of Trump's Republican Party have expressed concerns. This reflects the severity of the current situation.
Central bankers warn that political interference in the Federal Reserve could weaken trust in its commitment to control inflation. Such interference might potentially lead to higher inflation and increased volatility in global financial markets.
Global Implications of Fed's Independence
The Federal Reserve receives special attention because the United States operates as the world's largest economy. If inflation rises significantly in America, the country would likely export this higher inflation through financial markets. This would make it much harder for other central banks to keep their own prices under control.
"It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability," the group of central bankers emphasized in their statement. They stressed that maintaining the Fed's autonomy benefits not just the United States but the entire global financial system.
The unprecedented show of support from international central bankers highlights how seriously they view threats to institutional independence. Their collective action sends a strong message about the importance of keeping monetary policy decisions free from political pressure.
