BIS Defends Fed Independence Amid Political Pressure, Warns of Global Economic Risks

The Bank for International Settlements has issued a rare public defense of central bank autonomy following sustained attacks by former U.S. President Donald TRUMP on Federal Reserve Chair Jerome Powell. The Basel-based institution's annual report underscores the critical importance of insulated monetary policymaking for financial stability.

Political interference in interest rate decisions creates dangerous volatility, the BIS warned, without explicitly naming Trump. The former president's recent characterization of Powell as a "beast" and demands for premature rate cuts despite inflationary pressures represent an unprecedented challenge to institutional independence.

Market analysts note that such political pressures coincide with growing cryptocurrency adoption as some investors seek assets perceived as beyond government influence. While the BIS statement didn't reference digital assets directly, the defense of traditional financial institutions comes during a period of remarkable innovation in decentralized finance.