Australia's Treasurer stated on Friday his support for the nation's central bank governor aligning with the stance of Jerome Powell, the U.S. Federal Reserve Chair who is embroiled in controversy, calling the move "appropriate and reasonable."
This comes after the U.S. Federal Bureau of Investigation initiated an investigation into the renovation of the Federal Reserve's headquarters, following which the Trump administration pressured Powell with threats of criminal prosecution. In response, the Fed Chair issued a strong rebuttal, characterizing the investigation as a mere "pretext" for the government to manipulate interest rates and exert presidential influence.
The U.S. government's actions have reignited concerns about central bank independence globally and prompted opposition from numerous central bank governors. Michele Bullock, Governor of the Reserve Bank of Australia, joined her counterparts from Europe, the UK, Canada, and New Zealand in signing a joint statement expressing "full confidence in the Federal Reserve System and its Chair, Jerome H. Powell."
However, Adrian Orr, Governor of the Reserve Bank of New Zealand who took office just last December, faced criticism from New Zealand's Foreign Minister Winston Peters over this decision. Peters, a member of the populist New Zealand First party, stated that the New Zealand central bank should not interfere in U.S. political affairs.
At a press conference in Queensland, Australian Treasurer Jim Chalmers said that Governor Bullock had informed him of the decision, and he personally considered it "entirely appropriate."
Chalmers stated, "I know Jay Powell. In my view, he is an extremely professional and dedicated U.S. public official."
"The specific issues currently involved fall within the realm of U.S. domestic affairs, but the stance of the Australian government and its central bank governor is very clear."
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