A group of former Federal Reserve chairs has publicly defended Jerome Powell after the Justice Department launched a criminal investigation against him, raising concerns about the independence of the US central bank.
The move, they say, threatens the rules and traditions that have long underpinned America’s economic system.
Janet Yellen, Ben Bernanke, Alan Greenspan, and 10 other prominent former officials issued a joint statement on Monday, criticising the investigation as a dangerous example of political interference.
They compared it to actions taken in countries with weak institutions, warning it could destabilise inflation control and the broader economy.
"This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly," the statement said. "It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success."
The investigation follows months of sharp criticism from President Donald Trump, who has repeatedly attacked Powell’s handling of interest rates. Trump has called the Fed chair a "major loser" and "numbskull," while also urging faster interest rate cuts to reduce government borrowing costs and make loans cheaper for Americans.
Powell revealed the Justice Department probe in an unexpected video statement on Sunday, saying he faced threats of criminal charges related to his testimony to a Senate committee last year on Federal Reserve building renovations.
He described the inquiry as "unprecedented" and said it appeared to be motivated by the president’s dissatisfaction with the pace of rate cuts.
"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings," Powell said. "Those are pretexts."
The central bank reduced its key lending rate three times in the second half of 2025, bringing it to a three-year low of 3.50 to 3.75 percent. Trump has insisted this is not enough and has pressured the Fed to act faster, prompting Powell to describe the investigation as part of broader "threats and ongoing pressure" from the administration.
The statement defending Powell included former officials appointed by both Republican and Democratic presidents, showing rare bipartisan concern over the Justice Department’s actions.
White House spokeswoman Karoline Leavitt declined to comment directly on the Fed’s independence and referred questions to the Justice Department.
"Jerome Powell has proved he's no good at his job," Leavitt said. "As to whether he's a criminal, that's an answer the Department of Justice is going to have to find."
Yellen, speaking separately, called the investigation "extremely chilling" and questioned its motives. "Knowing Powell as well as I do, the odds that he would have lied are zero so I do believe they're going after him because they want his seat and want him gone," she said, adding that investors should pay attention to the risks posed by political pressure on the central bank.
"You have a president that says the Fed should be cutting rates to lower rate payments on the federal debt… It is the road to banana republic," Yellen warned, highlighting the potential consequences for economic stability if the investigation continues.
