World central bank chiefs 'stand in solidarity' with US Fed chair Powell

5 minutes agoDearbail JordanBusiness reporterCentral banks across the world have joined together to declare that they stand in "full solidarity" with the Federal Reserve's chair after the US launched a criminal investigation into Jerome Powell.The heads of the Bank of England, the European Central Bank and the Bank of Canada are among 11 senior bankers who have signed a statement highlighting the importance of independence in setting interest rates. "Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest," they said.The Department of Justice is conducting the probe. President Donald Trump has said he did not "know anything" about the investigation.The probe is linked to testimony Powell gave to a Senate committee about renovations to Federal Reserve buildings. It follows a year of relentless attacks on the Fed chair by Trump.As well as criticising Powell's decisions on interest rates, Trump has made personal comments, calling the Fed chair a "major loser" and a "numbskull".Commenting on the Fed chair, the global central bankers said in their joint statement: "To us, he is a respected colleague who is held in the highest regard by all who have worked with him."Until the weekend, Powell had stayed largely silent in the face of Trump's attacks but on Sunday, he publicly pushed back and warned that the independence of the US central bank was at stake."This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation," Powell said.In their joint statement on Tuesday, the senior financial institutions said: "The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve."It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability." Powell, who Trump nominated as Fed chair in 2017 during his first term in the White House, is set to step down in May.Trump is expected to name his successor in the coming weeks.North Carolina Senator Thom Tillis, a Republican who is a member of the Senate Banking Committee, said he would oppose the nomination of Powell's replacement by Trump, and any other Fed Board nominee, until the matter was "fully resolved".Powell has also been backed by three former chairs of the Fed - Janet Yellen, Ben Bernanke and Alan Greenspan. A number of other eminent former officials have publicly declared their support for him and the bank's independence. Yellen, who was Powell's immediate predecessor, said the criminal investigation was "extremely chilling", adding that investors should be concerned. "You have a president that says the Fed should be cutting rates to lower rate payments on the federal debt… It is the road to banana republic," she told CNBC.