War of words between US President and Fed Chair continued to send ripples throughout the globe
Reserve Bank of Australia (RBA) governor Michelle Bullock (pictured) has more allies in government than her New Zealand counterpart, by the looks of it.
Labor Treasury Jim Chalmers has come out in support of Bullock after she signed a letter of solidarity with US Federal Reserve Chair Jerome Powell amid verbal attacks from firebrand US president Donald Trump.
Trump has launched a full-frontal assault on Powell over the latter’s refusal to cut interest rates as fast or as deep as Trump would like. This is despite the supposed political independence of the Fed.
The US President has called Powell “a bad Fed person” who “has done a bad job” and is “either incompetent or crooked”.
“That jerk will be gone soon,” Trump warned.
The Justice Department under Trump has threatened legal action against the Federal Reserve, ostensibly in relation to Powell’s testimony before the Senate in 2025 regarding renovations to the central bank’s office building.
Trump has denied that this legal action has anything to do with his desire to see Powell removed from his position, although Powell is unconvinced.
Amid this war of words, Bullock earlier this week signed a statement in support of Powell and the independence of the central banks.
“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,” reads the statement.
It adds: “Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him.”
Chalmers has now backed Bullock's decision to sign the letter, calling her actions “appropriate".
"I know Jay Powell ... he strikes me as a very professional, very diligent public servant in the United States," Chalmers said.
Chalmers’ comments are in stark contrast to New Zealand Foreign Minister Winston Peters, who lambasted the Reserve Bank of New Zealand Governor Anna Breman for co-signing the letter in support of Powell.
"The RBNZ has no role, nor should it involve itself, in U.S. domestic politics,” Peter wrote on social media platform X earlier this week. “We remind the Governor to stay in her New Zealand lane and stick to domestic monetary policy."
Other signatories to the letter in support of Powell include the heads of central banks in Europe, England, Australia, Canada, South Korea, Scandinavia, Brazil and South Africa, as well as senior figures from the Bank for International Settlements.
