Major central banks back Powell, warn political pressure could threaten market stability

Governors from 11 major central banks issued a joint statement on Tuesday backing Federal Reserve Chair Jerome H. Powell and warning that political pressure on the Fed risks undermining financial and economic stability worldwide. The signatories included European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey, Bank of Canada Governor Tiff Macklem and leaders of the central banks of Sweden, Denmark, Switzerland, Norway, Australia, South Korea and Brazil; senior officials from the Bank for International Settlements also signed.

The statement comes after US authorities opened a criminal investigation into Powell over a $2.5 billion renovation of the Fed’s headquarters, a move the source said has intensified tensions between the central bank and the Trump administration. Senator Elizabeth Warren criticized Trump for targeting Powell, the source added.

Crypto industry figures cited potential market effects. Farzam Ehsani, CEO of VALR, said that central bank independence is traditionally considered a pillar of macroeconomic stability and that political influence affects investor confidence; he added that weaker confidence in dollar policy can drive interest in decentralized assets but that sudden political shocks increase volatility and short-term outflows.

Key Topics

Politics, Jerome Powell, Federal Reserve, European Central Bank, Donald Trump, Bitcoin