Trump Renews Criticism of Powell as Global Central Banks Defend Fed Independence

Trump’s renewed attacks on Jerome Powell prompted an unusually coordinated defence of Federal Reserve independence from global policymakers and Wall Street leaders.

---

President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell on Tuesday, describing him as “incompetent or corrupt” and suggesting his departure could be imminent.

The remarks triggered an unusually coordinated response from global central bank officials and senior Wall Street figures, who moved quickly to defend Powell and reinforce the importance of central bank independence.

The controversy follows reports that the US Department of Justice has initiated a criminal investigation into Powell. While the White House denied directing the probe, Trump accused Powell of mismanaging billions of dollars in renovation costs at the Federal Reserve’s Washington headquarters and criticised his overall leadership.

In response, the European Central Bank, Bank of England and Bank of Canada issued joint statements highlighting that central bank independence remains critical to maintaining price stability and market confidence.

JPMorgan Chase CEO Jamie Dimon warned that political pressure on the Federal Reserve could backfire, potentially driving higher inflation expectations and increased interest rates.

Senior Federal Reserve officials also reaffirmed their commitment to institutional independence. New York Fed President John Williams and St. Louis Fed President James Bullard emphasised that policy decisions will continue to be guided by economic conditions, not political influence.

Meanwhile, reports suggest the investigation was launched without prior notification to senior White House or Justice Department officials, raising concerns among policymakers. Treasury Secretary Bessent and Senate Majority Leader John Thune both questioned the move, warning against undermining the credibility of the Federal Reserve.

Attention is also turning to the US Supreme Court, which is set to review a case related to Trump’s attempt to remove Federal Reserve Governor Lisa Cook — a decision that could have broader implications for central bank governance.

White House National Economic Council Director Kevin Hassett sought to downplay the situation, describing the investigation as routine. He emphasised the need for transparency while reiterating his support for maintaining central bank independence.

Despite earlier plans to step down at the end of his term, Powell may now remain in office until 2028, according to Wall Street Journal reporter Nick Timiraos, as efforts intensify to preserve institutional stability.

---