The heads of major central banks have thrown their support behind the US Federal Reserve and its chairman Jerome Powell, saying in a joint statement Tuesday that it was “critical to preserve” their independence.
US prosecutors have issued subpoenas against Powell threatening a criminal indictment, an unprecedented move widely seen as an escalation of President Donald Trump’s campaign against the central bank.
The inquiry prompted a rare public rebuke by Powell on Sunday, who vowed to continue setting monetary policy “without political fear or favor”.
“We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell,” said the statement signed by chiefs of the European Central Bank, the Bank of England and others.
“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” it added.
“Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest.”
The statement was also signed by the central bank chiefs of Australia, Brazil, Canada, Denmark, South Korea, Sweden and Switzerland, as well as the chairman of the Bank for International Settlements.
The US inquiry concerns a $2.5 billion renovation of the Fed headquarters in Washington, which Trump has repeatedly attacked Powell of mismanaging.
Last year, Trump floated the possibility of firing Powell over cost overruns for the historic buildings’ facelift.
He has also slammed Powell as a “numbskull” and “moron” for the Fed’s policy decisions and not cutting borrowing costs more sharply.
In his video statement Sunday, Powell dismissed the renovation and testimony as “pretexts”.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he said.
