Reserve Bank of Australia Governor Michele Bullock has expressed support for US Federal Reserve Chair Jerome Powell after President Donald Trump intensified his public feud against him.
Bullock, along with more than a dozen other central bankers, voiced “full solidarity” with Powell after the US Department of Justice threatened him with a criminal indictment over his comments at a Senate Banking Committee hearing in June last year.
“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” the central bankers said. “It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability. Chair Powell has served with integrity, focused on his mandate and with an unwavering commitment to the public interest. To us, he is a respected colleague held in the highest regard by all who have worked with him.”
Trump, who appointed Powell during his first term, has repeatedly criticised the Fed chair since returning to office, publicly calling on him to cut interest rates and even suggesting he should be fired and replaced with someone willing to implement large rate cuts.
This week, Trump escalated the pressure campaign, with the Justice Department investigating and threatening criminal charges over Powell’s testimony to Congress regarding the cost of major Fed building renovations. Powell described the threats as “pretexts” in Trump’s campaign to seize control of US interest rate policy.
Economists warned that if a politicised Fed yielded to the president’s demands, it could damage the institution’s credibility. Politically independent central banks can more effectively take unpopular measures, such as interest rate hikes, to maintain long-term price stability.
Other signatories of the statement, published on the European Central Bank’s website, included ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, Swedish Central Bank Governor Erik Thedeen, Danish Central Bank Chair Christian Kettel Thomsen, and Swiss National Bank Chair Martin Schlegel. The Bank of Japan was not included, but the statement noted that additional signatories could be added later.
