Market Update: Bravo Reserve Bank Governor Anna Breman, but where’s Christopher Luxon as Donald Trump wreaks havoc? – Fran O’Sullivan – Full Analysis

“That would have been the advice of the Ministry of Foreign Affairs and Trade if the Governor had sought its advice, which she did not.”

In my opinion, it is ridiculous we have become so cowed as a nation that when a central bank governor stands staunchly alongside colleagues they have to be publicly rebuked.

Already, Breman is subject to considerable sledging: why didn’t she confer with foreign affairs officials? Or the Finance Minister or the Reserve Bank board before signing the statement?

Some of those criticising her have been critical of Finance Minister Nicola Willis for appointing the former first deputy governor of The Riksbank (Sweden’s central bank) to succeed Adrian Orr as governor of the Reserve Bank of New Zealand in the first place.

But the central bank leaders’ statement was careful. It said Powell had served with integrity, focused on his mandate and had an unwavering commitment to the public interest.

The signatories added “the independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve”.

“It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.”

Importantly, no other central bank governor has been chastened by political leaders for attaching their names to the quite anodyne statement.

Let’s not be Pollyannish.

The criminal subpoena that Pam Bondi’s Justice Department issued to the Fed chairman ostensibly relates to an investigation into whether Powell deceived Congress in testimony related to building cost blowouts.

The central bank heads have not commented directly on that.

But former Fed chairwoman Janet Yellen, who also served as Treasury Secretary under the Biden Administration, was direct.

In a Bloomberg interview, Yellen said: “President Trump wants the Fed to do what he thinks is best, and he’s made clear he is willing to pull out all the stops to get his way. This is something that, I think, would terrify anybody in a senior leadership position at the Fed. Namely, ‘I don’t like your views, so I’m going to call my friends at the Justice Department and tell them to level criminal charges against you and convene a grand jury and indict you.’

“When a President weaponises the Department of Justice and uses pretences to go after enemies, we’re not living in a democracy any more, if that’s allowed to happen.

“I see it as the bedrock of US economic stability. When central banks are not independent, inflation tends to be higher and economic performance is generally worse. When a central bank is not independent, monetary policy is usually set with an eye to political outcomes. And it’s a lot more popular to cut interest rates than to raise them. In the run-up to elections, it’s not unusual to see non-independent central banks cut interest rates, juice the economy and run the labour market hot.”

That is the subtext to the central bank leaders’ statement.

It’s also worth underlining the Federal Reserve is not the only institution to face cost blowouts.

Last year, the Australian Financial Review revealed the cost of renovating the RBA’s asbestos-ridden head office in Sydney’s Martin Place had blown out by A$1 billion ($1.2b) – from the initial estimate of $A260 million.

In New Zealand, the Herald revealed the Reserve Bank is paying a whopping $56m over 10 years for its new Auckland offices and is under pressure to sublease the space as a recent round of redundancies means its staff will only fill part of it.

In all this furore, Christopher Luxon has been absent.

New Zealand has stuck its head up before.

When the United States invaded the island nation of Grenada on October 25, 1983, then National Defence Minister David Thomson called me up to his Beehive office to strongly condemn the action.

Thomson was a distinguished figure. He had served in the New Zealand Army in the Middle East in World War II, was later a prisoner of war and was awarded the Military Cross in 1942.

But once the story went out, Prime Minister Sir Robert Muldoon slapped him down and swung New Zealand’s support behind the US.

He supported the US-led intervention as a way to counter Soviet/Cuban expansion in the Caribbean.

There are clearly parallels today with President Donald Trump’s actions in Venezuela.

But the important distinction is that Muldoon did publicly set out his rationale for backing Reagan. He was no milksop.

We don’t know where Luxon stands.

All we have here is Peters’ anodyne comment: “New Zealand is concerned by and actively monitoring developments in Venezuela and expects all parties to act in accordance with international law. New Zealand stands with the Venezuelan people in their pursuit of a fair, democratic and prosperous future.”

Don’t get me wrong there is a strong rationale to support Trump’s actions in removing the Venezuelan president Nicolás Maduro. It is what happens next that counts.

There also has yet to be a clear statement from Luxon on where New Zealand sits on Trump’s claim that the US owns the western hemisphere, or even the new US security framework that was released in Washington before Christmas.

Then there is Greenland.

A CNN survey found 25% of Americans favoured the US attempting to take control of the Danish territory.

This week, several European nations including France, Germany, Sweden and Norway said they would send troops to Greenland to participate in a Danish military exercise, amid repeated threats by Trump that the US could use force to seize the island.

Luxon sits in on the calls French President Emmanuel Macron convenes from Nato’s coalition of the willing, which is supporting Ukraine.

Trump’s actions pose a threat to Nato unity.

Can New Zealand sit out a potential move on a Nato member? Or can we follow Breman’s lead and stand for what is important?