Exclusive: IMF's Georgieva says central bank independence critical, backs Powell

• Powell is under investigation by the Trump administration for cost overruns on a $2.5 billion Fed headquarters renovation project, which he calls a pretext for pressure to lower interest rates
• Georgieva stated 'the Fed is precious for the Americans' and 'very important for the rest of the world' given the dollar's role as a reserve currency
• Trump dismissed warnings that undermining Fed independence could weaken the dollar and spark inflation, telling Reuters 'I don't care,' while also attempting to fire Fed Governor Lisa Cook in a case headed to the Supreme Court

Summary: IMF Chief Backs Powell, Emphasizes Central Bank Independence Amid Trump Pressure

Key Developments:

IMF Managing Director Kristalina Georgieva voiced strong support for Federal Reserve Chair Jerome Powell on January 15, 2026, during a Reuters interview in Kyiv. She emphasized the critical importance of central bank independence while Powell faces a Trump administration investigation over cost overruns on a $2.5 billion Fed headquarters renovation project.

Main Points:

• Georgieva praised Powell as "a very good professional" and "very decent man," noting his standing among international colleagues
• Powell has disclosed the investigation but denies wrongdoing, calling it a pretext for pressure to lower interest rates
• The probe has drawn criticism from Republican senators, foreign officials, investors, and former U.S. government officials from both parties
• Trump has repeatedly attacked Powell for slow interest rate cuts and stated Wednesday he doesn't care if undermining Fed independence would weaken the dollar and spark inflation
• Trump is also attempting to fire Fed Governor Lisa Cook, with the legal case heading to the Supreme Court next week

Market Implications:

The IMF chief warned that eroding Fed independence could undermine the U.S. dollar's reserve currency status and trigger inflation. Georgieva stressed the Fed is "precious for Americans" and "very important for the rest of the world," given the dollar's global role. The situation creates significant uncertainty around U.S. monetary policy independence and potential impacts on dollar stability and inflation expectations.