BoC's Macklem says he gives Fed Chair Powell his full support

Bank of Canada Governor Tiff Macklem issued a statement backing U.S. Federal Reserve Chair Jerome Powell after Powell said the U.S. Justice Department subpoenaed the Fed; Macklem said Powell has his 'full support' and stressed central bank independence.

Bank of Canada Governor Tiff Macklem publicly backed U.S. Federal Reserve Chair Jerome Powell on Monday as the Fed chair faces an inquiry by the U.S. Department of Justice. Powell said the DOJ subpoenaed the Federal Reserve late last week in connection with testimony he gave to the Senate about a renovation project for Federal Reserve buildings. Powell has described the actions as linked to pressure over interest rate decisions. Macklem said Powell has his "full support" and emphasized that independence allows monetary policy decisions to be made based on evidence rather than politics. Key points: - The U.S. Department of Justice subpoenaed the Federal Reserve regarding Powell's June Senate testimony about a US$2.5-billion renovation project, Powell said. - Governor Tiff Macklem said Powell "reflects the very best in public service" and gave him his "full support." - Macklem and a bipartisan group of former Fed chairs and economists stressed the importance of central bank independence from short-term political interference. - Market data from LSEG Data & Analytics showed investors did not expect rate cuts from the Bank of Canada or the U.S. Fed at their late-January meetings. Summary: Macklem's public support highlights cross-border concern among central bankers about political pressure and reiterates the role of independence in setting monetary policy. Undetermined at this time.