OTTAWA — Bank of Canada governor Tiff Macklem came to the defence of his U.S. counterpart Jerome Powell on Monday as the chair of the Federal Reserve faces a criminal investigation from President Donald Trump’s justice department.
Powell said Sunday that the U.S. DOJ had subpoenaed the Fed late last week in connection with testimony he gave to the Senate in June about a renovation project to Federal Reserve buildings in Washington, D.C.
Powell alleged the threatened criminal indictment was a response to independent monetary policymakers south of the border refusing to lower interest rates per Trump’s wishes.
Macklem, who also spoke in Powell’s defence back in September as pressure mounted from the Trump administration, said in a statement Monday that the Fed chair “reflects the very best in public service” and has his “full support.”
“Chair Powell is doing a very good job under difficult circumstances, guiding the Fed to take monetary policy decisions based on evidence, not politics,” Macklem said in a media statement.
The Bank of Canada and the U.S. Fed both operate independently from government and set interest rates in an effort to keep inflation at two per cent annually. The Fed has an added dual mandate to promote maximum employment in the U.S. economy.
Trump has lashed out at Powell for not cutting interest rates fast enough to boost economic growth.
Macklem said the independence of central banks is critical to delivering price stability and gives monetary policymakers the space to take difficult decisions that benefit the economy, “free from short-term political interference.”
A bipartisan group of former Fed chairs and top economists on Monday compared the Trump administration’s actions to moves made in more impoverished countries.
As of Monday, financial markets expect neither the Bank of Canada nor the U.S. Fed to cut interest rates at their upcoming decisions at the end of January, according to LSEG Data & Analytics.
Some analysts said the market’s muted response reflects a widespread belief that Powell could successfully fend off the allegations that his description to lawmakers of the Fed’s US$2.5 billion project was criminal.
Trump has repeatedly used investigations — which might or might not lead to an actual indictment — to attack his political rivals, including Fed governor Lisa Cook, New York Attorney General Letitia James and James Comey, the former FBI director.
White House press secretary Karoline Leavitt told reporters that Trump did not direct his Justice Department to investigate Powell.
“One thing for sure, the president’s made it quite clear, is Jerome Powell is bad at his job,” Leavitt said. “As for whether or not Jerome Powell is a criminal, that’s an answer the Department of Justice is going to have to find out.”
This report by The Canadian Press was first published Jan. 12, 2026.
— with files from The Associated Press.
Craig Lord, The Canadian Press
