Bankers: Full Solidarity With Powell   01/13 06:07

   Central bankers from around the world said Tuesday they "stand in full 
solidarity" with U.S. Federal Reserve Chair Jerome Powell, after President 
Donald Trump dramatically escalated his confrontation with the Fed with the 
Justice Department investigating and threatening criminal charges.

   FRANKFURT, Germany (AP) -- Central bankers from around the world said 
Tuesday they "stand in full solidarity" with U.S. Federal Reserve Chair Jerome 
Powell, after President Donald Trump dramatically escalated his confrontation 
with the Fed with the Justice Department investigating and threatening criminal 
charges.

   Powell "has served with integrity, focused on his mandate and an unwavering 
commitment to the public interest," read the statement signed by nine national 
central bank heads including European Central Bank President Christine Lagarde 
and Bank of England Governor Andrew Bailey.

   They added that "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."

   The dispute is ostensibly about Powell's testimony to Congress in June over 
the cost of a massive renovation of Fed buildings. But in a statement Sunday, 
Powell, abandoning his previous attempt to ignore Trump's relentless criticism, 
called the administration's threat of criminal charges "pretexts'' in the 
president's campaign to seize control of U.S. interest rate policy from the 
Fed's technocrats.

   Trump has repeatedly criticized Powell and the Fed for not moving faster to 
cut rates. Economists warn that a politicized Fed that caves in to the 
president's demands will damage its credibility as an inflation fighter and 
likely lead investors to demand higher rates before investing in U.S. Treasurys.

   Other signatories of the statement carried on the ECB's website were Erik 
Thedeen, governor of Sweden's central bank; Christian Kettel Thomsen, chair of 
Denmark's central bank; Swiss National Bank Chair Martin Schlegel; Michele 
Bullock, governor of the Reserve Bank of Australia; Tiff Macklem, governor of 
the Bank of Canada; Bank of Korea Governor Chang Yong Rhee; Gabriel Galipolo, 
governor of the Banco Central do Brasil.

   Also attaching their names were Franois Villeroy de Galhau, board chair of 
the Bank for International Settlements, and Pablo Hernndez de Cos, BIS general 
manager. The BIS is an international organization of central banks based in 
Basel, Switzerland.

   One prominent central bank not included in the statement was the Bank of 
Japan. The statement said that more signatures could be added later.