Global central banks work on statement in solidarity with Fed's Powell, Bloomberg News reports

• The Justice Department investigation targets Powell's comments to Congress about a $2.5 billion renovation of the Fed's Washington headquarters
• Powell publicly rebuked the move as a 'pretext' to gain presidential influence over interest rates, an unusually sharp response from the Fed chair
• The investigation has drawn criticism from former Fed chiefs and key Republican Party members, prompting unprecedented international central bank solidarity

Summary

Global central bank officials are preparing a joint statement of solidarity with Federal Reserve Chair Jerome Powell following the Trump administration's launch of a criminal investigation into him. The statement, expected to be issued under the Bank for International Settlements (BIS) banner, could be released as early as Tuesday, January 13, and will be open for all central banks to sign.

The BIS serves as an umbrella organization for global central banks and is often called the "central bank to the world's central banks."

The U.S. Justice Department initiated the investigation last week regarding Powell's congressional testimony about cost overruns on a $2.5 billion renovation of the Federal Reserve's Washington headquarters. Powell made these comments to Congress last summer.

The administration's move has triggered significant backlash, drawing criticism from former Fed chairs and prominent Republican Party members. Powell publicly rebuked the investigation, calling it a "pretext" to gain presidential influence over interest rate decisions—a sharp departure from typical Fed chair communications.

Market Implications:

The unprecedented criminal investigation into a sitting Fed chair raises concerns about central bank independence, a cornerstone of monetary policy credibility. The coordinated global central bank response underscores the international community's view of this as a threat to institutional autonomy. Any perceived political interference in Fed operations could impact market confidence, currency stability, and long-term inflation expectations.

Neither the BIS nor the Federal Reserve has commented on the Bloomberg report, and Reuters could not independently verify the information at publication time.