Global central banks offer ‘full solidarity' to US Fed's Powell amid Trump threats

• The joint statement, coordinated by the Bank for International Settlements, calls central bank independence 'a cornerstone of price, financial and economic stability' and praises Powell's 'integrity' and 'unwavering commitment to the public interest'
• The DoJ investigation allegedly relates to costly renovations at Fed headquarters, though Trump claims he was unaware of it despite repeatedly criticizing Powell for not cutting interest rates fast enough
• Former Fed chairs Greenspan, Bernanke, and Yellen also condemned the move, warning it resembles 'how monetary policy is made in emerging markets with weak institutions' with 'highly negative consequences for inflation'

Summary: Global Central Banks Rally Behind Fed Chair Powell Amid Trump Pressure

Nine central bank governors have issued an unprecedented joint statement expressing "full solidarity" with Federal Reserve Chair Jerome Powell, following threats to his independence from the Trump administration. The statement, coordinated by the Bank for International Settlements, was signed by leaders including the Bank of England's Andrew Bailey and ECB's Christine Lagarde, with additional signatories expected.

Key Development: The U.S. Department of Justice has reportedly threatened Powell with criminal indictment, allegedly related to "abuse of taxpayer dollars" concerning costly renovations at Fed headquarters. Powell characterized this as "unprecedented action" designed to pressure the Fed on monetary policy decisions.

Background: Trump, who appointed Powell in 2018, has repeatedly criticized him for not cutting interest rates quickly enough. The Fed has reduced rates three times since last summer, but Trump demands faster action. Powell is scheduled to step down as chair in May, with Trump expected to announce his successor soon.

Broader Support: Three former Fed chairs—Alan Greenspan, Ben Bernanke, and Janet Yellen—issued their own statement Monday, warning the investigation could have "highly negative consequences" and comparing the situation to monetary policy practices in "emerging markets with weak institutions."

Market Implications: The crisis raises serious concerns about Fed independence, a cornerstone of financial stability. Central bankers emphasized that independence is "critical to preserve" for maintaining price and economic stability. Any erosion of Fed autonomy could trigger inflationary pressures and undermine confidence in U.S. monetary policy globally.

Trump has claimed ignorance of the investigation, stating "I don't know anything about it."