Global central bankers back Fed independence after Powell investigation

Global central bank leaders have issued a rare, coordinated show of support for US Federal Reserve Chair Jerome Powell.

This comes after federal prosecutors opened a criminal investigation linked to the $2.5 billion renovation of the Fed’s headquarters in Washington, DC, and Powell’s related testimony to Congress.

In a joint statement released on Tuesday, central bankers said they were standing “in full solidarity” with the Federal Reserve System and its chair, framing the moment as a test of whether monetary policy decisions can remain insulated from political influence.

The statement follows Powell’s own comments on Sunday evening, when he confirmed the investigation and warned of wider implications for how interest rates are set in the United States.

Rare united front from global central bank leaders

The statement was signed by European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey, alongside several other central bank chiefs.

The central bankers’ message included signatories beyond Europe and the UK, with support also coming from the central bank chiefs of Brazil, Switzerland, Sweden, Denmark, South Korea, Australia, and Canada.

They described central bank independence as a core foundation for price stability, financial stability, and broader economic stability, emphasising that this principle exists to serve citizens.

The signatories also said it was critical to preserve independence while maintaining full respect for the rule of law and democratic accountability.

Their message was framed as support for institutions rather than politics, presenting the investigation as an event with potential consequences that extend beyond the Fed itself.

The statement also praised Powell personally, saying he had served with “integrity”, remained focused on his mandate, and stayed committed to the public interest.

It added that he was regarded as a respected colleague by those who have worked with him.

Fed probe ties to $2.5 billion headquarters renovation

Powell said on Sunday evening that federal prosecutors had launched a criminal investigation into the renovation of the central bank’s headquarters in Washington, DC, and into his testimony to Congress connected to the project.

The investigation centres on a $2.5 billion renovation, a large figure that has drawn scrutiny as the Fed continues to play a major role in steering economic conditions through interest rate decisions.

Powell’s statement confirmed the probe publicly, bringing the issue into sharper focus for financial markets and political observers.

Powell links investigation to pressure from Trump on rates

Powell has faced sustained pressure from US President Donald Trump to cut interest rates more quickly and by a larger amount than the Fed has delivered.

In his Sunday remarks, Powell said the investigation was tied to the president’s frustration over the pace and scale of rate cuts.

In a video statement posted to the Fed’s X account, Powell said the threat of criminal charges was the result of the Fed setting rates based on its best assessment of what would serve the public, rather than matching the president’s preferences.