RBA Governor Backs Fed Chair Amid Escalating Trump Feud

Reserve Bank of Australia (RBA) Governor Michele Bullock has expressed full solidarity with U.S. Federal Reserve Chair Jerome Powell, as former U.S. President Donald Trump intensifies his public and political attacks on the independent central bank.

Governor Bullock joined more than a dozen central bank leaders worldwide in issuing a joint statement defending Powell, after the U.S. Department of Justice threatened a criminal indictment related to Powell’s testimony before the Senate Banking Committee in June last year.

“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” the statement said. The signatories stressed that safeguarding central bank autonomy, while respecting the rule of law and democratic accountability, is critical to maintaining economic confidence.

The statement further praised Powell’s leadership, noting that he has served with integrity, remained focused on his mandate, and demonstrated an unwavering commitment to the public interest. The central bankers described him as a respected colleague held in the highest regard by his peers.

Trump, who originally appointed Powell during his first term, has repeatedly criticised the Fed chair since returning to office, publicly urging him to cut interest rates and calling for his removal — a move that breaks with long-standing norms of presidential non-interference in monetary policy.

The dispute escalated sharply this week after Trump’s Justice Department launched an investigation and issued subpoenas to the Federal Reserve, citing Powell’s comments on the cost of renovations to Fed buildings. Powell has dismissed the threat of criminal charges as a “pretext,” arguing it is part of a broader effort to undermine the Fed’s independence and exert political control over interest rate decisions.

Economists have warned that any erosion of central bank independence could severely damage the Fed’s credibility. Politically independent central banks are seen as better equipped to take difficult and sometimes unpopular decisions, such as raising interest rates, to control inflation and ensure long-term price stability.

Among the signatories supporting Powell are European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey, Swedish central bank Governor Erik Thedeen, Danish central bank Chair Christian Kettel Thomsen, and Swiss National Bank Chair Martin Schlegel. While the Bank of Japan was not included, the statement indicated that additional signatories may be added.