In a joint statement, the Swedish Central Bank, the European Central Bank (ECB) and the Bank of England said that Powell “is a respected colleague” and expressed “full solidarity with Powell.” They also emphasized that the independence of central banks is a cornerstone when it comes to financial and economic stability.
"It is therefore crucial to preserve this independence, in full respect for the rule of law and democratic accountability," Sweden's Erik Thedéen, the Bank of England's Andrew Bailey and the ECB's Christine Lagarde, among others, wrote in the statement.
Threat of prosecution
On Monday, a number of former Federal Reserve governors and Treasury ministers issued a call for the central bank's independence. Those who signed the call include Janet Yellen, Ben Bernanke and Alan Greenspan.
The background is the threat of prosecution against Federal Reserve Chair Powell, which is linked to a criminal investigation into renovations of the Fed's main building. Powell has said it is actually about the Fed not lowering interest rates as much as Trump wanted.
This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether monetary policy will instead be driven by political pressures or threats, Powell said in a video commenting on the development.
Battle with Powell
Trump has repeatedly clashed with the Fed chair during his presidency. He has called Powell a “stubborn mule” because the Fed has not cut interest rates as much as Trump wanted. He has also suggested that Powell built himself a “palace” in connection with the renovation.
Jerome Powell's term as Fed chair expires in May. However, he can remain on the board until 2028. He has not yet announced his intentions.
