Major central bank governors issue a joint statement of “full solidarity” with the US Federal Reserve and Chair Jerome Powell, defending their independence amid unprecedented political pressure.
LONDON: The heads of the world’s major central banks have issued a joint statement expressing “full solidarity” with the US Federal Reserve and its chairman Jerome Powell.
The statement, released on Tuesday, declared it “critical to preserve” the independence of central banks.
It comes as US prosecutors have issued subpoenas against Powell, threatening a criminal indictment.
This unprecedented legal move is widely seen as an escalation of President Donald Trump’s campaign against the central bank.
Powell issued a rare public rebuke on Sunday, vowing 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,” the joint statement said.
It was signed by the 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.
The statement also praised Powell for serving “with integrity, focused on his mandate and an unwavering commitment to the public interest.”
The central bank governors of Australia, Brazil, Canada, Denmark, South Korea, Sweden and Switzerland also signed the statement.
The chairman of the Bank for International Settlements added his signature.
The US inquiry centres on a USD 2.5 billion renovation of the Fed’s Washington headquarters.
Trump has repeatedly attacked Powell over the project’s alleged mismanagement.
Last year, Trump floated the possibility of firing Powell over cost overruns for the historic building’s facelift.
He has also personally insulted Powell, calling him a “numbskull” and “moron” over the Fed’s policy decisions.
In his video statement, Powell dismissed the renovation issue and his testimony as “pretexts”.
He stated the threat of criminal charges stemmed from the Fed setting rates based on public interest, not presidential preference.
