Global Central Bank Chiefs Rally Behind US Fed Chair Powell Amid Criminal Probe

World central bank leaders have closed ranks behind US Federal Reserve chair Jerome Powell, issuing an unusually strong joint statement warning that political pressure on monetary policy threatens global economic stability.

The heads of 11 major financial institutions — including the Bank of England, the European Central Bank and the Bank of Canada — said they stood in “full solidarity” with Powell after the US Department of Justice opened a criminal investigation into his conduct.

The probe centres on testimony Powell gave to a Senate committee concerning renovations to Federal Reserve buildings. President Donald Trump has said he does not “know anything” about the investigation.

‘Unwavering commitment to the public interest’

In their statement, the central bankers praised Powell’s record and underscored the principle of central bank independence.

“Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest,” they said, describing him as a “respected colleague” held in the highest regard by peers worldwide.

The show of support follows months of escalating attacks on Powell by President Trump, who has repeatedly criticised the Fed for not cutting interest rates more aggressively. Trump has also made personal remarks about the Fed chair, branding him a “major loser” and a “numbskull”.

Powell breaks silence

Until recently, Powell had largely avoided responding publicly. Over the weekend, however, he warned that the independence of the US central bank was under threat.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation,” he said.

The Federal Reserve has lowered interest rates three times since September, bringing its key lending rate to about 3.6%. Policymakers remain divided over the next move, with concerns that further cuts could fuel inflation.

Official data released on Tuesday showed US consumer prices rose 2.7% in the year to December — unchanged from November and still above the Fed’s 2% target.

Global warning on independence

The international banking chiefs stressed that the stakes extend beyond the United States.

“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” the statement said.
“It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.”

Powell, first nominated as Fed chair by Trump in 2017, is due to step down in May. The president is expected to announce a successor in the coming weeks.

Political backlash in Washington

Several Republican lawmakers have questioned the justice department’s move. Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, said he would block confirmation of Powell’s replacement — and any other Fed board nominees — until the issue is “fully resolved”.

Another Republican on the committee, Senator Kevin Cramer, said he disagreed with Powell’s leadership but did not believe he had committed a crime, adding that the investigation should be concluded quickly to restore confidence.

Senator Lisa Murkowski went further, describing the probe as “an attempt at coercion”.

Powell has also received backing from three former Fed chairs — Janet Yellen, Ben Bernanke and Alan Greenspan. Yellen, his immediate predecessor, warned the investigation could unsettle investors.

“You have a president that says the Fed should be cutting rates to lower rate payments on the federal debt,” she said. “It is the road to banana republic.”

Signatories to the statement

The statement was signed by leaders including Andrew Bailey of the Bank of England, Christine Lagarde of the European Central Bank, Tiff Macklem of the Bank of Canada, and senior figures from central banks in Europe, Asia, Australia and Latin America, as well as the Bank for International Settlements.