LONDON–Central banks from around the world have issued statements saying they stand in “full solidarity” with the Federal Reserve Chairman Jerome Powell after the Department of Justice said it had launched a criminal investigation of the chairman.
As the CU Daily reported here, the Justice Department last week served grand jury subpoenas on the Federal Reserve and has threatened a possible criminal indictment tied to Powell’s testimony before the Senate Banking Committee in June of 2025 over a multiyear renovation of the Federal Reserve’s headquarters in Washington that has gone well over budget. No charges have been filed.
Former NCUA Chairman Todd Harper and all living former Fed chairs and other senior executives also issued joint statements in support of Powell, saying the investigation is politically motivated and threatens the Fed’s independence.
The Signees
The heads of the Bank of England, the European Central Bank and the Bank of Canada and 11 other senior bankers have also signed a statement highlighting the importance of independence in setting interest rates.
“Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest,” they said.
In their joint statement on Tuesday, the international financial institutions said: “The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.”
Powell Responds
In an unusual video response, Powell said, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.”
Senator Wants Issue ‘Resolved’
Meanwhile, North Carolina Senator Thom Tillis, a Republican who is a member of the Senate Banking Committee, said he would oppose the nomination of Powell’s replacement by Trump, and any other Fed Board nominee, until the matter was “fully resolved”.
The committee must approve the next Fed nominee so if Tillis keeps that pledge, it could delay the nomination of any Trump pick to replace Powell, analysts noted.
