In a remarkable show of unity, the world's leading central bankers have issued a powerful joint statement expressing "full solidarity" with US Federal Reserve Chair Jerome Powell. This unprecedented move comes as Powell faces renewed political pressure and public criticism from former President Donald Trump, who appointed him to the role in 2018.
A Cornerstone of Stability Under Threat
The statement, coordinated by the Bank for International Settlements in Basel, was signed by nine governors. It declares that the independence of central banks is a cornerstone of price, financial and economic stability. It argues this independence must be preserved "with full respect for the rule of law and democratic accountability."
Signatories include the heads of some of the world's most influential financial institutions. From Europe, Bank of England Governor Andrew Bailey and European Central Bank President Christine Lagarde added their names. They were joined by the governors of the central banks of Sweden, Denmark, Switzerland, Brazil, South Korea, and Canada.
Praise for Powell's Integrity Amid Legal Scrutiny
The governors paid direct tribute to Powell's "integrity" and his "unwavering commitment to the public interest." They described him as a "respected colleague who is held in the highest regard by all who have worked with him."
This support follows a dramatic escalation in the long-running clash between Powell and Trump. Earlier this week, Powell released a video statement revealing he is being prosecuted by the US Department of Justice. He labelled the action "unprecedented" and suggested it should be seen in the context of the administration's threats and ongoing pressure over monetary policy.
The Department of Justice has stated the case relates to an "abuse of taxpayer dollars," which is widely assumed to concern a costly renovation project at the Fed's headquarters.
A Political Battle Over Monetary Policy
The core of the dispute stems from Trump's repeated public criticism of Powell for not cutting interest rates quickly enough to stimulate the economy. Trump's attacks have consistently challenged the traditional political independence of the Federal Reserve, an institution designed to operate free from short-term political influence.
The timing of the joint statement is highly significant. Powell is due to step down as Chair of the Federal Reserve Board in May 2025. Trump, as the presumptive Republican presidential nominee, is expected to announce his preferred successor in the coming weeks, setting the stage for a major political decision on the future leadership of the world's most powerful central bank.
This collective action by global central bankers underscores the deep concern within international financial circles about political interference. It represents a stark warning about the risks of undermining the institutional safeguards that underpin global economic stability.
