Reserve Bank of Australia governor Michele Bullock has joined a group of leading central bankers in publicly backing US Federal Reserve chair Jerome Powell, warning that attacks on the Fed threaten the principle of central bank independence after former president Donald Trump escalated his criticism.
In a statement signed by nine senior officials, including Bullock, European Central Bank president Christine Lagarde and Bank of England governor Andrew Bailey, the group said Powell had "served with integrity" and stressed that the independence of central banks was a cornerstone of price, financial and economic stability.
The intervention follows moves by the US Justice Department to investigate Powell over his June congressional testimony on cost overruns and delays in renovations to the Fed’s headquarters, an issue Trump has seized on while repeatedly criticising the Fed for not cutting interest rates more aggressively.
Economists have warned that political pressure on the Fed risks undermining its credibility as an inflation fighter.
In a statement issued on Jan. 11, Powell said threats of criminal charges were "pretexts" in a broader campaign by the administration to exert control over US monetary policy.
Bullock has previously cautioned that markets were underestimating the economic risks posed by the unpredictability of Trump's trade policies, and has praised the Fed for staying out of political debate.
She has argued that stable inflation expectations depend on public trust in independent central banks.