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Michele Bullock joins the leaders of the world’s central banks in declaring ‘full solidarity’ with Jerome Powell
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Michele Bullock joins the leaders of the world’s central banks in declaring ‘full solidarity’ with Jerome Powell

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The heads of global central banks, including Australia’s Michele Bullock, have issued a rare joint statement backing US Federal Reserve Chairman Jerome Powell.
Bullock is one of 11 world central bank leaders who signed a statement stressing the importance of central bank independence, something that was called into question after Powell declared the investigation an act of intimidation designed to pressure the central bank to cut rates.

“We stand in full solidarity with the Federal Reserve System and its Chairman Jerome H. Powell,” the leaders of 11 of the world’s largest central banks said in a joint statement.

The heads of the Reserve Bank of Australia, the European Central Bank, the Bank of England, the Bank of Canada and seven other institutions said Powell had acted with integrity and that the central bank’s independence was crucial to keeping prices and financial markets stable.

“The independence of central banks is a cornerstone of price, financial and economic stability in the interests of the citizens we serve,” the statement said.

Trump repeats the demand for interest rate cuts and criticizes Powell

U.S. President Donald Trump on Tuesday again demanded Powell cut borrowing costs after a government report showed consumer prices rose 2.7 percent in December from a year earlier, and repeated his accusations of misconduct in the renovations.
“Well, he’s billions of dollars over budget. So he’s either incompetent or he’s crooked. I don’t know which he is, but he’s not doing that, and he’s certainly not doing it very well,” Trump told reporters in Washington.

“We have very low inflation. That would give ‘belated Powell’ the opportunity to give us a nice, big rate cut,” Trump said.

The head of the US central bank, Jerome Powell, will be criminally investigated for alleged ‘misuse of taxpayers’ money’ after a renovation budget ballooned. It’s part of a long-standing issue involving Donald Trump. Source: AP / Julia Demaree Nikhinson/AP

Asked whether the Powell investigation will affect the timing of the appointment of a new Fed chief, Trump said: “No.”

Asked when he expects to announce that decision, Trump said: “Sometime in the next few weeks.”

Members of the Fed banks reaffirm their independence

Despite hopes that a leader picked by Trump could lead to more rate cuts, central bank members said neither Powell nor his successor would suddenly change policy in the president’s favor.
“All of my colleagues and I are committed to setting monetary policy, the best monetary policy for the economy at any given time and for all Americans,” Alberto Musalem, chairman of the St. Louis Fed, said Tuesday.

“I don’t expect that commitment to change, regardless of who is the chairman.”

Independence from government influence has been the main basis of modern central banking.
It remained the unquestioned standard until Trump began demanding lower tariffs and putting pressure on individual policymakers when they failed to meet obligations.
The outpouring of solidarity Monday followed opposition from several lawmakers in Trump’s Republican Party, including members of the Senate Banking Committee who have the power to block the president’s nomination of a more biddable successor to Powell.
The current Fed chief’s term ends in May. Powell revealed late Sunday that the U.S. central bank had received subpoenas from the U.S. Department of Justice over what he told Congress regarding the $2.5 billion renovation of the Fed’s headquarters in Washington.

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