Bank of Canada Governor Tiff Macklem has offered a strong endorsement of Jerome Powell, Chairman of the Federal Reserve, after Powell revealed the central bank had been served with grand jury subpoenas. Macklem stated, “I reiterate my full support for Federal Reserve board chair Jay Powell, who reflects the very best in public service,” in a statement to Bloomberg News on Monday (Tuesday AEDT). He added, “Chair Powell is doing a very good job under difficult circumstances, guiding the Fed to take monetary policy decisions based on evidence, not politics.”
This represents Macklem’s clearest support for the Fed Chair to date. In the past, the Bank of Canada Governor has generally criticised attacks on Powell, particularly those he perceived as threatening central bank independence, a principle he considers “sacrosanct.”
Macklem reiterated the importance of this principle, asserting that independence is “critical to successful monetary policy” and that central banks with operational independence are “more successful at delivering price stability for their citizens.” He emphasized that independence provides central bankers the necessary space to make tough decisions that benefit the economy and its citizens, without being subject to short-term political interference.
The Bank of Canada is the nation’s central bank, responsible for monetary policy and promoting the financial well-being of Canada. The Federal Reserve, often referred to as the Fed, is the central bank of the United States.
