Central banks defend Fed Chair Powell after Trump threat

Several major central bank leaders issued a joint statement backing Federal Reserve Chair Jerome Powell and stressed that central bank independence is vital, after a U.S. administration criminal probe into the Fed's headquarters renovation was announced.

Senior leaders of many of the world's major central banks issued a joint statement supporting Federal Reserve Chair Jerome H. Powell on Tuesday. The statement followed an announcement of a U.S. administration criminal probe linked to renovation work at the Fed's headquarters, which Powell described as a pretext to seek presidential influence over interest rates. The Bank of Canada, the European Central Bank, the Bank of England and eight other institutions joined the statement, and it also included the chair of the Bank for International Settlements. The group said Powell had acted with integrity and underlined that central bank independence is crucial for maintaining price and financial stability. Key points: - Central bank chiefs issued a rare, joint statement expressing solidarity with the Federal Reserve and its chair. - The statement emphasized that the independence of central banks is a cornerstone of price and financial stability. - The U.S. investigation concerns renovation work at the Fed's headquarters; Powell called the probe a political pretext. - No specific next legal or procedural step was identified; Undetermined at this time. Summary: The joint statement highlights international concern about political pressure on central banks and stresses that independence supports stable prices and markets. Central bankers warned that perceived political influence over the Fed could weaken trust and complicate efforts to meet inflation objectives. Undetermined at this time.