Global central banks reaffirm support for Fed Chair Powell amid unprecedented political pressure

Central banks from around the world — including the Bank of England, the European Central Bank, and the Bank of Canada — have issued a rare joint declaration of “full solidarity” with U.S. Federal Reserve Chair Jerome Powell after the Trump administration escalated political pressure by threatening criminal action against him. The coordinated intervention underscores mounting global concern over the politicisation of monetary policy and its implications for financial stability.

The statement, released on 13 January, was signed by leaders of 11 major monetary authorities, among them the ECB’s Christine Lagarde, the Bank of England’s Andrew Bailey, and senior figures from central banks in Switzerland, Sweden, Australia, South Korea, Brazil, and Denmark. Officials from the Bank for International Settlements also lent their support.

In their message, the signatories affirmed that “the independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” adding that it is “critical to preserve that independence, with full respect for the rule of law and democratic accountability.”

The statement followed reports that the U.S. Department of Justice had opened an investigation into Powell’s testimony concerning the Fed’s $2.5bn headquarters renovation. Powell described the probe as “a pretext,” alleging that its true aim was to influence monetary policy decisions — particularly on interest rates.

The Trump administration has repeatedly criticised the Federal Reserve for declining to cut rates further, arguing that tighter policy has slowed economic growth. Last week, a White House spokesperson confirmed that the president intends to announce Powell’s replacement “within weeks,” a move that would mark an unprecedented early intervention in the Fed’s governance.

The solidarity statement drew swift backing from leading financial institutions. JPMorgan Chase chief executive Jamie Dimon warned that “undermining the credibility of central banks risks destabilising markets, fuelling inflation expectations, and eroding investor confidence.” Similar concerns were echoed by economists across Europe, who said that political interference could reverberate through bond markets and currency stability.

Powell, whose current term expires in May 2026, has so far declined to speculate on his future at the Fed but reiterated that “monetary policy will continue to be set in the interests of the American people, based on data, not politics.”

The incident has revived debate over the delicate balance between democratic accountability and institutional independence in modern monetary systems. While central banks have faced political pressure before, a coordinated defence of one governor by peers from multiple continents is virtually without precedent.

The move has been interpreted internationally as both symbolic and practical — a signal that policymakers see the defence of institutional autonomy as vital to maintaining global confidence at a time of economic uncertainty and geopolitical strain.