Twelve Signatures, One Message
Why Global Central Bankers Are Defending the Fed
Why Global Central Bankers Are Defending the Fed
On January 13, 2026, twelve of the world’s most powerful central bankers did something central bankers do not do. They signed a joint public letter defending a colleague from his own government.
The statement came in response to the Trump administration’s escalating campaign against Federal Reserve Chair Jerome Powell, which had by then included a Department of Justice criminal investigation. The signatories were not retired officials or academics offering personal views. These were the sitting heads of the institutions that manage the world’s major currencies, and they were putting their names to a document that amounted to a direct intervention in American domestic politics.
Christine Lagarde, President of the European Central Bank, signed not in her personal capacity but on behalf of the ECB Governing Council. This distinction matters. The Governing Council comprises the ECB’s six Executive Board members plus the governors of all twenty-one eurozone national central banks. Her single signature carried the institutional weight of the entire eurozone monetary establishment. François Villeroy de Galhau joined as both Chair of the Bank for International Settlements and Governor of the Bank of France. The governors of the Bank of England, the Swiss National Bank, the Bank of Canada, the Reserve Bank of Australia, the Bank of Korea, and the central banks of Brazil, Sweden, Denmark, and Norway added their names. The Bank of Japan was notably absent.
The statement itself was measured in tone but unmistakable in meaning. It declared that “the independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve.”
Central bankers communicate through carefully calibrated signals. They adjust interest rates in fractions of a percentage point. They parse forward guidance for subtle shifts in language. They do not sign public letters. They do not comment on the domestic political situations of other countries. That they felt compelled to break with decades of institutional convention tells you how seriously they regarded the threat.
Why would central bankers in London, Frankfurt, and Sydney risk diplomatic friction with Washington to defend Jerome Powell? Because the dollar is not only America’s currency. It is the operating system on which global finance runs.
Foreign exchange markets now turn over $9.6 trillion every day. The dollar appears on one side of 89.2 percent of all trades. The euro, the world’s second most traded currency, reaches 28.9 percent. The Chinese renminbi, despite two decades of talk about its rise, manages 8.5 percent. The ten most traded currency pairs in the world all involve the dollar.
The dollar’s grip on trade invoicing is similarly firm. Federal Reserve research shows the dollar denominates 96 percent of trade invoicing in the Americas and 74 percent in the Asia-Pacific region. The United States accounts for only about 10 percent of global trade, which means the vast majority of dollar-invoiced transactions involve parties on neither side who are American. A South Korean company selling electronics to a Brazilian retailer will price and settle the transaction in dollars, not won or reais.
Foreign governments and central banks hold their reserves primarily in dollars. According to the International Monetary Fund, the dollar accounts for 57.8 percent of global foreign exchange reserves, roughly $6.7 trillion. The euro holds 20 percent. China’s renminbi, despite years of effort by Beijing to internationalise its currency, manages 2.12 percent.
This architecture means that Federal Reserve policy decisions do not stay within American borders. When the Fed raises interest rates, it raises the cost of dollars everywhere. A European bank funding dollar assets pays more. An Asian exporter hedging receivables pays more. An emerging market government that borrowed in dollars to build roads and ports pays more. The Fed, in effect, is the central bank of the world.
The central bankers who signed the statement understand this architecture because they operate within it. They hold dollars. They conduct swap arrangements with the Fed. They watch their own currencies move when Powell speaks. A Fed that loses its independence, that becomes subject to political direction on interest rate decisions, would be a Fed whose commitments could no longer be trusted.
The swap lines that provided liquidity during the 2008 crisis depend on credibility. The inflation expectations that anchor global prices depend on credibility. The entire system depends on the belief that the institution at its centre will act on economic judgment rather than political instruction.
The signatories were not defending Jerome Powell, the man. They were defending the architecture on which their own monetary systems depend. The letter was measured. The stakes were not.