RBA stands in ‘full solidarity’ with US Federal Reserve amid DOJ investigation

RBA governor Michele Bullock has joined eleven other central bank leaders in declaring “full solidarity” with US Federal Reserve chair Jerome Powell after the US Department of Justice (DOJ) launched an unprecedented investigation against him.

In a joint statement made late on Tuesday (13 January), central bank leaders underscored the importance of central bank independence to maintain economic stability.

“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 statement read.

“Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him.”

The DOJ’s indictment related to Powell’s testimony before the Senate Banking Committee in June 2025 concerning a project to renovate Federal Reserve office buildings. The DOJ claimed that Powell had misled Congress about the project, which had suffered time and cost blowouts.

In a statement on Sunday (11 January), Powell warned that the move was an intimidation tactic that threatened the independence of the US central bank and its ability to set monetary policy based on evidence, not political whims.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said in the statement.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”

Speaking to Accounting Times, IFM Investors chief economist Alex Joiner said a move to indict Powell would only further entrench uncertainty surrounding the US market, with implications for Australia’s super sector, which was heavily invested in the US economy.

Joiner noted that investors would be wary of any moves that resulted in “an erosion of the frameworks and the institutions that underpin risks in the country.”

“To my mind there is no more important institution than the Fed, at least for financial market participants, to have confidence in when investing in the US.”