‘The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,’ reads statement
Reserve Bank of Australia Governor Michelle Bullock (pictured)v has backed her US counterpart, Federal Reserve Chair Jerome Powell, amid a political onslaught from combative US President Donald Trump.
Trump has long had an adversarial relationship with Powell due to the latter’s refusal to bow to Trump’s demands to lower interest rates.
Trump wants much lower rates to stimulate growth and markets, but Powell has resisted cutting as fast or as far as Trump wants, leading to various verbal volleys against the Fed Chair.
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,” warned Trump during a speech at the Detroit Economic Club in Michigan earlier this week.
The Justice Department under Trump has threatened legal action against the Federal Reserve, ostensibly in relation to his testimony before the Senate in 2025 regarding renovations to the central bank’s office building.
While Trump denies that this legal action has anything to do with his desire to see Powell removed from his position, Powell is unconvinced.
"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell said in a video message over the weekend.
He added: “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings… 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.”
Powell has received support from his counterparts across the globe amid these unprecedented intrusions into central bank policy by the executive branch.
In a new statement signed by nine central bankers, including Bullock, European Central Bank President Chrisine Lagarde, Christian Kettel Thomsen, Chairman of the Board of Governors of the Danmarks Nationalbank, and Anna Breman, Governor of the Reserve Bank of New Zealand, they said Powell “has served with integrity, focused on his mandate and an unwavering commitment to the public interest”.
“We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell. 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,” said the statement.
