Loss of independence of U.S. Fed would particularly affect Canada: BoC’s Macklem

Bank of Canada Governor Tiff Macklem is seen during a news conference in Ottawa on Wednesday, Jan. 28, 2026. THE CANADIAN PRESS/Adrian Wyld

The head of the Bank of Canada says a loss of independence at the U.S. Federal Reserve would affect Canadian financial markets because of how integrated the two economies are.

Speaking at a news conference after the latest rate decision, bank governor Tiff Macklem said it’s hard to predict what the implications would look like, but that keeping the Fed operating independently is good for Americans and Canadians.

Macklem’s comments come as U.S. President Donald Trump has repeatedly criticized U.S. Fed chair Jerome Powell and the Fed for not moving faster to cut rates.

Trump dramatically escalated his confrontation with the Fed earlier this month with the Justice Department investigating and threatening criminal charges, which Powell said were “pretexts” in the president’s campaign to seize control of U.S. interest rate policy from the Fed’s technocrats.

Macklem was among the central bankers from around the world who said they “stand in full solidarity” with Powell, and emphasized that the independence of central banks is a cornerstone of price, financial and economic stability.

Economists warn that a politicized Fed that caves to the president’s demands will damage its credibility as an inflation fighter and likely lead investors to demand higher rates before investing in U.S. Treasuries.

This report by The Canadian Press was first published Jan. 28, 2026. With files from The Associated Press.