Central Bank Leaders Support Fed Chair Amid Investigation
Central bank leaders from around the world issued a collective statement on Tuesday backing Federal Reserve Chairman Jerome Powell, who is currently under a criminal investigation initiated by the Justice Department during the Trump administration.
Powell disclosed on Sunday that a subpoena had been sent to a grand jury, linking to allegations of perjury related to his previous testimony regarding the Fed’s renovation projects before the Senate Banking Committee last summer. In a rare video address, he suggested that the investigation serves as a political maneuver to coerce the Fed into lowering interest rates.
President Donald Trump has publicly criticized Powell’s modernization plans, suggesting that he has made significant errors as his administration pushes for rate cuts to stimulate the economy.
“We fully stand with the Federal Reserve and its Chairman Jerome H. Powell,” the central bank leaders declared. “The independence of central banks is essential for maintaining price stability and economic integrity for those we serve.”
The statement emphasized the importance of maintaining independence while respecting the rule of law. It noted that Powell has fulfilled his responsibilities with integrity and a strong commitment to public welfare. The leaders also expressed their esteem for Powell as a respected colleague.
Signatories included notable figures such as ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem, among others. The list also featured central bank leaders from Sweden, Denmark, Norway, Switzerland, South Korea, Brazil, and South Africa, along with leaders from the Bank for International Settlements.
Powell stated in his video message that he respects the law and understands that no one is above it; however, he contended that the current actions should be seen in light of ongoing political pressures. He argued that this issue isn’t just about his past testimony or building renovations but reflects broader concerns regarding the Fed’s autonomy in making rate decisions.
Trump, who appointed Powell, claimed ignorance of the subpoena during an NBC News interview, asserting that his primary concern is that rates are too high, which he believes is the only legitimate pressure on Powell.
U.S. Attorney for the District of Columbia, Janine Pirro, stated that the Fed has not adequately responded to inquiries from her office regarding claims of overspending on the renovation project, asserting that the legal effort should not be seen as a threat.
Trump has continuously pressured Powell to cut interest rates throughout his presidency, even labeling him as “crazy” and “stupid.” During the tumult over the renovation costs, he inaccurately suggested the project would cost significantly more than projections indicated.
Reportedly, the Fed’s renovation costs surged from an initial estimate of $1.9 billion in 2019 to nearly $2.5 billion in 2025 due to rising material prices and needed remediation of hazardous substances. Last summer, Powell provided Trump and his associates a tour of the renovations at the Fed. In a heated moment, Trump claimed the project would cost even more than estimates indicated, a figure Powell later clarified included prior renovations that had been completed.
The Trump administration is also reportedly attempting to remove Fed Director Lisa Cook amidst a separate investigation involving mortgage fraud allegations.
Cook has denied wrongdoing, and after Trump sought to oust her, a federal judge blocked the move, indicating potential violations of her due process rights. The White House has appealed this decision, with the case expected to be heard by the Supreme Court soon.
