11 Major Central Banks Simultaneously Support Powell as Trump Escalates the $2.5 Billion Investigation

Top global central bank leaders have collectively voiced support for Federal Reserve Chairman (Fed) Jerome Powell, warning that political pressures targeting the Fed could shake global market confidence. This move comes after the Trump administration escalated a criminal investigation related to the $2.5 billion Fed headquarters renovation project in Washington, raising concerns about the independence of the central bank. In a joint statement, representatives from 11 major central banks affirmed their “full support for Mr. Powell,” emphasizing that central bank independence is fundamental to price stability, financial resilience, and public trust. Signatories include the European Central Bank (ECB), the Bank of England, the Bank of Canada, the Bank of Korea, the Swiss National Bank, and several other major organizations. The statement describes Mr. Powell as a respected colleague who consistently acts with a clear focus on his mission. Powell Warns of Risks to Fed Independence International support emerged after Mr. Powell’s rare and direct remarks over the weekend. On January 12, the Fed Chair confirmed that the U.S. Department of Justice had issued a grand jury subpoena to the central bank and threatened potential criminal charges related to his testimony before the Senate Banking Committee in June 2025. That hearing focused on the multi-year cost overruns of the Fed headquarters renovation project, now estimated at $2.5 billion—about $700 million above the initial budget. In a televised statement, Mr. Powell suggested the investigation is a “retaliation” because the Fed kept interest rates higher than President Trump publicly preferred. He stated that the risk of criminal prosecution stems from the Fed’s policy being “based on the best assessment of public interest, rather than bowing to the President’s priorities.” He also warned that monetary policy could be influenced by threats rather than economic evidence. Trump Denies Interference, Markets Watch Closely President Trump dismissed any connection between the investigation and interest rate policies, saying he was unaware of the subpoenas and criticizing Mr. Powell’s leadership both in managing the Fed and overseeing the construction project. However, he affirmed that he “would not consider” using the Department of Justice to pressure the central bank. The White House emphasized that the DOJ acts independently. The investigation has heightened months-long political tensions. In July 2025, Representative Anna Paulina Luna officially referred allegations related to Mr. Powell’s statements to the Department of Justice. Senator Thom Tillis announced he would block future Fed nominations until the matter is clarified, questioning the independence of the Department of Justice itself. Conversely, Senator Elizabeth Warren accused Trump of abusing prosecutorial powers to bend the Fed to his will, viewing this as an attack on the foundations of economic governance. Market reactions were swift but cautious: the US dollar weakened, US stock futures declined slightly, and Treasury bonds gained value as investors considered the implications of prolonged pressure on the Fed. Powell’s Future and the Broader Context Mr. Powell’s term as Fed Chair will end on May 15, 2026, although his governorship extends until January 2028. President Trump has announced he will not renominate Powell and has indicated he has chosen a successor, with National Economic Council Director Kevin Hassett seen as a leading candidate. According to political sources, Trump’s public calls for investigations into perceived opponents—viewed as “dissenters”—have complicated previous prosecutions and could undermine any future cases against Mr. Powell, especially given the President’s repeated criticisms of the Fed’s interest rate policies. The latest developments show that the confrontation between the White House and the Fed has gone beyond typical policy debates, becoming a major test of the central bank’s independence—a key pillar of global financial stability.