Global central bankers unite in defense of Fed Chair Powell following start of probe

Global central bankers on Thursday called for protecting US Federal Reserve Chair Jerome Powell, after federal investigators initiated a probe into the central bank's renovation project and the chair's testimony.

"We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell," central bank governors, including European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey, said in a joint statement.

"The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability," they said.

The statement noted that 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," it stated.

The heads of the central banks of Brazil, Switzerland, Sweden, Denmark, South Korea, Australia, and Canada were among those who signed the statement.

The statement of support for Powell follows the Fed chief's announcement on Sunday night that federal prosecutors had opened a criminal investigation into the $2.5 billion renovation of the central bank's Washington, DC headquarters and his testimony before Congress.

Powell, who has been under constant pressure from US President Donald Trump to reduce interest rates, claimed that the investigation was the outcome of the president's annoyance at not being able to drop rates as much and as soon as he desired.

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell said.