Treasurer Jim Chalmers has defended US central bank boss Jerome Powell as professional and diligent after the Trump administration launched a criminal investigation into the Federal Reserve chair.Â
Mr Chalmers said it was entirely appropriate for Australian Reserve Bank governor Michele Bullock to sign a letter in support of Mr Powell endorsed by a group of central bankers on Tuesday night.
Michele Bullock has signed a rare joint statement in solidarity with under-fire US Federal Reserve Bank chair Jerome Powell. (AAP: Bianca De Marchi)
The treasurer said the US investigation was a matter for authorities there, but he was a big supporter of the independence of central banks to set interest rates.
On Monday, Mr Powell said a criminal investigation into him over gigantic cost overruns at the Federal Reserve’s headquarters was a pretext to attack him because he had refused to slash interest rates as much as US President Donald Trump desired.
Mr Powell’s revelation that he was under criminal investigation prompted a flood of support from fellow central bankers, including the letter signed by Ms Bullock and 15 other bank bosses.
Jerome Powell is facing criminal prosecution driven by US President Donald Trump. (Supplied)
In the letter, the central bankers said they “stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell” and stressed the importance of their independence.
On Friday, Mr Chalmers said Ms Bullock told him she was going to sign the letter before doing so.
“I told her at the time that I consider that to be appropriate,” he said on Friday.
“I think it’s unsurprising that central bank governors from around the world would support central bank independence, and I think it’s entirely appropriate that the governor of the Reserve Bank of Australia would lend her name to that.”
He said he knew Mr Powell.
Donald Trump has accused Jerome Powell of wrongdoing over renovations to the central bank’s Washington headquarters. (Reuters:Â Carlos Barria)
“I’ve met with the chairman of the Federal Reserve on a number of occasions, and I’ve participated in a number of meetings with him over the years as well, and he strikes me as a very professional, very diligent public servant in the United States,” Mr Chalmers said.
“I know him a little bit, I respect him, and that’s been my experience with him.”Loading…
The treasurer said central bank independence was “absolutely essential”, pointing to Albanese government reforms that established a separate rate-setting board.
“I am a very big supporter of central bank independence. It’s why my Reserve Bank review reforms were all about making our central bank more independent, not less, strengthening our independent Reserve Bank rather than weakening it,” Mr Chalmers said.
“It’s why I don’t predict or pre-empt decisions that are taken independently, correctly, by the Reserve Bank and its board.”