Bank of Canada Governor Backs Fed Chair Powell Amid DOJ Investigation

Bank of Canada Governor Tiff Macklem has publicly backed U.S. Federal Reserve Chair Jerome Powell amid a criminal investigation launched by the U.S. Department of Justice. Macklem said Powell represents the highest standards of public service and reaffirmed his full support for the Fed chair during a period of intense political pressure.

Powell disclosed on Sunday that the Justice Department subpoenaed the Federal Reserve over testimony he delivered to the U.S. Senate in June regarding renovation costs for Federal Reserve buildings in Washington, D.C. Powell suggested the threat of criminal charges was linked to the Trump administration’s dissatisfaction with the Fed’s refusal to lower interest rates aggressively.

In a statement from Ottawa, Macklem emphasized that Powell is making monetary policy decisions based on economic evidence, not political demands. He stressed that central bank independence is essential for maintaining price stability and ensuring long-term economic health.

Both the Bank of Canada and the U.S. Federal Reserve operate independently from government influence, with inflation control as a core mandate. The Fed also has a dual responsibility to support employment in the U.S. economy. Macklem warned that political interference weakens trust in financial institutions.

Financial markets reacted cautiously to the news, with analysts noting that investors expect Powell to withstand the investigation. Market data suggests neither the Bank of Canada nor the Federal Reserve is expected to cut interest rates at their upcoming January policy meetings.