The Reserve Bank of Australia has shown its support for the embattled chairman of the US Federal Reserve, Jerome Powell.
Australia is named in a statement of support released by the central banks of Europe, Asia and the Americas on Tuesday (Australian time).
Fourteen banks have been named in the statement including those of England, Brazil, New Zealand, South Korea, Switzerland, Denmark and the EU’s bank, the European Central Bank.
“We stand in full solidarity with the (US) Federal Reserve system and its chairman, Jerome H. Powell,” the statement reads.
“The independence of central banks is a cornerstone of price, financial and economic stability.
“It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.”
The banks say Powell “has served with integrity, focused on his mandate and an unwavering commitment to the public interest”.
“To us, he is a respected colleague who is held in the highest regard by all who have worked with him.”
The statement notes that other central banks may be added to the list of signatories at a future date.
FEDERAL RESERVE CHIEF SPEAKS OUT
Powell is facing criminal charges from the US Justice Department after grand jury subpoenas in a move widely seen as politically motivated.
He issued a video statement in which he says the threatened criminal indictment stems from his testimony to a Senate banking committee about renovations to the Reserve’s historic offices.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike.
“In every case, I have carried out my duties without political fear or favour, focused solely on our mandate of price stability and maximum employment,” he says.
Powell says the threatened charges are politically motivated.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment rather than follow the preferences of the president,” he says.
Powell has found bipartisan support in the US Congress and from former senior government finance officials.
Media outlets are reporting on US fears that a successful ouster of Powell as Fed Reserve chairman would drive up inflation and interest rates.
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