Australia’s Treasurer on Friday expressed support for the country’s central bank head after she publicly stood in solidarity with U.S. Federal Reserve Chair Jerome Powell, describing her decision as “entirely appropriate.”
The statement comes amid heightened tensions in the United States, where the Trump administration has threatened Powell with a potential criminal indictment over a probe into renovations at the Fed’s headquarters. Powell has strongly rebuffed the threats, calling them a “pretext” aimed at exerting presidential influence over U.S. interest rates—a move that has reignited global concerns about the independence of central banks.
In response, central bank governors from several countries, including Australia, signed a statement expressing full support for Powell and the Federal Reserve System. Reserve Bank of Australia (RBA) Governor Michele Bullock joined her counterparts from Europe, England, Canada, and New Zealand in signing the solidarity declaration, signaling a united front among leading monetary authorities against political interference.
Speaking at a briefing in Queensland, Treasurer Jim Chalmers said Bullock had informed him about her decision, and he assured her that he considered it “entirely appropriate.”
“I know Jay Powell,” Chalmers said, using the Federal Reserve Chair’s nickname. “He strikes me as a very professional, very diligent public servant in the United States.”
Chalmers emphasized that while the specific legal and political issues surrounding the U.S. probe are a matter for American authorities, the stance of Australia’s government and central bank is clear. “The specific issues at play here are a matter for the Americans but the Australian position, the government’s position and the governor’s position are very clear,” he said.
The controversy in Washington has drawn attention not only in the United States but across the globe. Economists and financial analysts warn that any perceived erosion of central bank independence could undermine market confidence and destabilize international financial systems. The Fed’s autonomy in setting interest rates is viewed as critical to managing inflation and maintaining long-term economic stability.
Bullock’s decision to align publicly with Powell reflects a broader trend among central bankers who are asserting the importance of institutional independence in the face of political pressure. By signing the joint statement, she joined a chorus of voices defending the integrity of monetary policy decisions from partisan influence.
Not all reactions have been universally supportive. In New Zealand, the Reserve Bank of New Zealand (RBNZ) Governor Anna Breman, who only took office in December, also signed the statement in solidarity. However, the move was criticized by New Zealand’s Foreign Minister Winston Peters of the populist New Zealand First party, who said the central bank had no role in U.S. politics.
Chalmers’ endorsement of Bullock’s action signals a careful balance in Australia’s approach. While affirming central bank independence, he avoided commenting directly on the legal or political dynamics in the United States, instead emphasizing professional respect for Powell’s conduct.
Global markets have been closely monitoring developments in the United States, with investors sensitive to any suggestion of political interference in monetary policy. The solidarity expressed by central bank leaders in Australia, Europe, and other regions is widely seen as a message that such interference is unacceptable and that central banks must remain insulated from political pressure.
As the situation continues to unfold, the alliance of international central bank heads underscores the critical role these institutions play in maintaining financial stability worldwide. For Australia, supporting Bullock’s decision also reflects a broader commitment to the principle that economic governance must be based on expertise and public service, rather than political expediency.
Chalmers’ remarks, highlighting both professional respect for Powell and confidence in Bullock’s judgment, reinforce the Australian government’s view that central banks must operate independently to safeguard economic stability at home and abroad.
