Former Monetary and Financial Chiefs Warn: "Powell Investigation Undermines Central Bank Independence... Fears of U.S. Becoming Like an Emerging Economy"

Joint Statement by Greenspan, Bernanke, Yellen, and Others

As Jerome Powell, Chairman of the United States Federal Reserve (Fed), faces the possibility of criminal charges by the U.S. Department of Justice, former central bank and treasury chiefs-including Alan Greenspan, Ben Bernanke, and Janet Yellen-as well as prominent economists, have publicly criticized the Donald Trump administration and voiced their support for Chairman Powell.

Ben Bernanke, former Chairman of the United States Federal Reserve (Fed). San Francisco ? Special Correspondent Haeyoung Kwon

In a joint statement released on the 12th (local time), the former central bank and treasury leaders strongly condemned the reported criminal investigation into Chairman Powell, calling it "an unprecedented attempt to use prosecutorial powers to undermine the independence of the central bank." They continued, "This is a method of monetary policy decision-making seen in emerging countries with weak institutional foundations, which has led to severe negative consequences for inflation and the overall functioning of the economy. Such actions are entirely inappropriate for the United States, which has built its economic success on the rule of law."

The statement further emphasized, "The independence of the Fed and public trust in it are crucial to achieving the objectives mandated by Congress: price stability, maximum employment, and moderate long-term interest rates." It warned that undermining the central bank's independence could pose serious risks to the entire U.S. economy.

This statement was endorsed by a wide range of current and former key economic policymakers from both the Republican and Democratic parties. Signatories included former Fed chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, as well as former Treasury Secretaries Henry Paulson, Timothy Geithner, Robert Rubin, and Jacob Lew. The bipartisan nature of the statement is underscored by the fact that these individuals led monetary and fiscal policy under administrations from opposing parties. Leading American economists such as Glenn Hubbard, Kenneth Rogoff, and Jared Bernstein also joined the statement.

Previously, Chairman Powell disclosed that he had been notified by the Washington, D.C. federal prosecutor's office of the possibility of criminal charges related to his testimony before the Senate Banking Committee in June of last year, regarding the remodeling of the Fed headquarters. In political and financial circles, this investigation is widely interpreted as an attempt by the Trump administration to pressure Chairman Powell-who has resisted calls for interest rate cuts-under the pretext of issues surrounding the Fed headquarters renovation costs.

Regarding this, former Secretary Yellen said in an interview with CNBC, "It is an extremely chilling situation," adding, "What is surprising is that the market is not taking this matter more seriously. This is clearly something that should be of greater concern." She further pointed out, "The reason they are targeting Powell is because they want his position and want to push him out."

Former Secretary Yellen also criticized attempts to use monetary policy to reduce the national debt interest burden as irresponsible. She said, "There is a president who insists that the Fed should lower interest rates to reduce the federal government's interest costs," adding, "I completely disagree with this. That is the road to becoming a banana republic."

Earlier, at the 'American Economic Association Annual Meeting 2026' held on January 4, she also warned that "the Fed is not a financing arm for the fiscal authorities," and that the Trump administration's encroachment on central bank independence could push the United States toward the so-called risk of 'fiscal dominance.' She pointed out that if the monetary authorities are pressured to lower interest rates to reduce the federal government's debt burden, it could fuel inflation and financial market turmoil, ultimately backfiring on the U.S. economy.

Former Secretary Yellen served as Fed Chair from 2014 to 2018 and as Treasury Secretary under the previous Joe Biden administration. Chairman Powell succeeded Secretary Yellen as Fed Chair and has led the central bank to the present day. Chairman Powell's term as Fed Chair is set to expire in May, but his term as a Fed Governor will continue until January 2028.