Global central banks have issued an extraordinary joint statement offering “full solidarity” to US Federal Reserve chair, Jerome Powell, in the face of the latest threat to his independence from Donald Trump’s White House. The statement, coordinated by the Basel-based Bank for International Settlements, was signed by nine central bank governors including Andrew Bailey of the Bank of England and Christine Lagarde of the European Central Bank, alongside governors from Australia, Sweden, Denmark, Switzerland, Brazil, South Korea, and Canada. They unequivocally stated that “The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” asserting that it is critical to preserve this independence with respect for the rule of law and democratic accountability. The signatories paid testament to Powell’s “integrity” and “unwavering commitment to the public interest,” recognizing him as a “respected colleague who is held in the highest regard.”

This unprecedented show of international support comes after a dramatic turn in the ongoing clash between Powell and former President Trump, who had repeatedly criticized Powell, whom he appointed in 2018, for failing to cut interest rates fast enough and personally attacked him as a “numbskull.” The situation escalated when Powell issued a strongly worded video statement, revealing he was being prosecuted by the US Department of Justice. He described this as “unprecedented action” that “should be seen in the broader context of the administration’s threats and ongoing pressure” over monetary policy. Powell stated he had been singled out because the Fed’s policymaking board had set interest rates “based on our best assessment of what will serve the public, rather than following the preferences of the president.” Trump has, however, moved to distance himself from the investigation, claiming he was unaware of it.

The Department of Justice has stated the case relates to “abuse of taxpayer dollars,” which is assumed to be in relation to costly renovations at the Fed’s Washington headquarters. This inquiry is seen by many as a direct assault on the Federal Reserve’s independence, evoking historical warnings. More than 50 years ago, then-Chair Arthur Burns yielded to pressure from President Richard Nixon to keep interest rates low to aid his 1972 reelection, leading to “extraordinary and severe inflation.” It took a fresh streak of independence from Paul Volcker, the Fed chair under President Jimmy Carter, to push interest rates higher, rebalance the economy, and bring inflation down. This history underscores that the importance of a trustworthy and independent central bank, led by a thoughtful leader who makes decisions without regard to political ramifications, cannot be overstated; it is paramount to the success and stability of the U.S. economy and global financial systems. Any threat to an unfettered, unrestrained Fed is a threat to these fundamental economic foundations.

The criminal investigation into Powell, emerging from the office of Jeanine Pirro, a longtime confidante of Donald Trump, is particularly disturbing. It comes amid a constant pressure campaign against Powell, just weeks after Trump highlighted the notion of “a suit against Powell for incompetence.” Critics point to the irony of the inquiry’s focus on cost overruns in building renovations, given Trump’s own unilateral White House ballroom construction efforts. The inquiry is not only viewed as further evidence of a weaponized Justice Department but also reveals an attempt to consolidate control, thereby “eviscerating the laws and traditions protecting an independent central bank.”

The backlash against the probe has been bipartisan within Congress. Republican Senators Thom Tillis and Lisa Murkowski have pushed back, promising to block any Fed nominations, including efforts to replace Powell whose term as chair ends on May 15, until the situation is resolved. GOP House Financial Services Committee Chairman French Hill stated that the investigation “could undermine this and future Administrations’ ability to make sound monetary policy decisions.” Rep. Andrew Garbarino (R-Bayport), a member of that committee, echoed this sentiment, saying the Fed’s “independence is essential to its mission and should not be undermined by political pressure,” a rare public break with the administration.

However, the Island’s other Republican congressman, Nick LaLota of Amityville, remained silent on Monday regarding the pushback, instead stating, “If Powell did nothing wrong, the truth will set him free.” He added that taxpayers “deserve to know what goes into a building that costs 50% more than the New York Giants’ 82,500-seat MetLife Stadium — especially if an investigation reveals evidence of waste, fraud or abuse.” It is important to note that the Fed is technically not a taxpayer-funded institution but is self-funded, largely via interest income from government securities it holds. Long Island’s two Democratic members of the House, Rep. Tom Suozzi and Rep. Laura Gillen, also voiced concern about efforts to exert political influence on interest-rate decisions, emphasizing the need for the Federal Reserve to remain independent, especially during times of economic uncertainty.

Former Fed chairs Alan Greenspan, Ben Bernanke, and Janet Yellen had already condemned the threat to Powell, warning that the move could have “highly negative consequences,” likening it to how monetary policy is made in emerging markets with weak institutions. Despite the pressure, Powell remains resolute, asserting that “Public service sometimes requires standing firm in the face of threats.” Powell is due to step down as chair of the Fed board in May, with Trump expected to announce his successor in the coming weeks.