Central bank chiefs, bank CEOs back Powell

Trump renews push for big Fed rate cut

- BALAZS KORANYI MANYA SAINI

Jerome Powell testifies on Capitol Hill last February. Mr Powell is the first head of the US Federal Reserve to face a criminal investigation.NYT

(NYT)

Global central bank chiefs and top Wall Street bank CEOs lined up in support of Federal Reserve Chair Jerome Powell on Tuesday after the Trump administration threatened him with a criminal indictment, evidence of the relationships Mr Powell has built during his years at the Fed and of the importance of the US central bank to global financial markets.

The outpouring of solidarity followed pushback from several lawmakers in President Donald Trump’s Republican Party on Monday, including members of the Senate Banking Committee who have the power to block the president's nomination of a more biddable successor to Mr Powell. The current Fed chief’s term ends in May.

Mr Powell revealed late on Sunday the US central bank had received subpoenas from the US Justice Department about what he told Congress regarding the $2.5 billion renovation of the Fed’s headquarters in Washington.

Breaking from his past non-confrontational approach to Trump's repeated threats to fire him, Mr Powell called out the probe as intimidation meant to pressure the central bank to slash interest rates.

The developments were enough to provoke scepticism even from some of Mr Powell's bigger critics in Congress who have not baulked at other efforts by Trump to reshape the Fed, including his so-far unsuccessful attempt to oust Fed Governor Lisa Cook over what the administration said was mortgage fraud.