"Central bankers from around the world said Tuesday they "stand in full solidarity" with U.S. Federal Reserve Chair Jerome Powell, after President Donald Trump dramatically escalated his confrontation with the Fed with the Justice Department investigating and threatening criminal charges.Powell "has served with integrity, focused on his mandate and an unwavering commitment to the public interest," read the statement signed by nine national central bank heads including European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey."
"They added that "the independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability." The dispute is ostensibly about Powell's testimony to Congress in June over the cost of a massive renovation of Fed buildings."
"But in a statement Sunday, Powell, abandoning his previous attempt to ignore Trump's relentless criticism, called the administration's threat of criminal charges "pretexts" in the president's campaign to seize control of U.S. interest rate policy from the Fed's technocrats."
National central bank leaders expressed unified support for Federal Reserve Chair Jerome Powell amid a conflict with the U.S. administration and a Justice Department probe. The leaders affirmed that central bank independence underpins price, financial and economic stability and must be preserved with respect for the rule of law and democratic accountability. The immediate dispute centers on Powell's congressional testimony about renovation costs, while Powell labeled threats of criminal charges as "pretexts" aimed at seizing control of interest rate policy. Economists warned that politicizing the Fed would harm its credibility and raise borrowing costs as investors demand higher yields.
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