Global central banks offer ‘full solidarity’ to US Fed’s Powell – a parody

The Guardian reports that nine (9) “global central banks have issued an extraordinary joint statement offering “full solidarity” to the US Fed chair, Jerome Powell, in the face of the latest threat to his independence from Donald Trump’s White House.

“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,” the statement said which was signed by nine central bank governors including the Bank of England governor, Andrew Bailey, and the chair of the ECB, Christine Lagarde. It was coordinated by the Basel-based Bank for International Settlements, which added its chair and general manager to the signatories.”

The Guardian reported that beyond the 9 signatories were “the central bank governors of Australia, Sweden, Denmark, Switzerland, Brazil, South Korea and Canada. More names are expected to be added later on Tuesday”.

Indeed, Trump has repeatedly criticised Powell, whom Trump appointed in 2018, for failing to cut interest rates fast enough. Cutting interests would enhance the US economy.

The US DoJ has opened a criminal investigation into Powell but it is not clear how this is connected to Powell’s financial policy decisions, in particular, as he is to step down, soon.

The DoJ said that the case relates to “abuse of taxpayer dollars” – assumed to be in relation to costly renovations at the Fed’s headquarters. “Powell is due to step down as chair of the Fed board in May, and Trump is expected to announce his successor in the coming weeks.”

Besides that the criminal case is a simple internal matter of the US, the concerted action against Trump of some countries (where the central banks are not always independent from the political leaderhsip) seems more like another assault on the Trump Admunistration and may have nothing to do with international financial policy or the defense of the independence of central banks – which is anyway only theoretical in most, if not all countries.