New Zealand Foreign Minister Winston Peters has publicly rebuked NZ Reserve Bank (NZRB) governor Anna Breman for adding her signature to those of other global central bankers standing in solidarity with US Federal Reserve chairperson Jerome Powell.

The US Department of Justice instigated a criminal investigation into Powell and the Fed over his testimony about cost overruns for renovations at the bank. Powell hit back, saying the probe was in reality “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public” rather than following the demands of President Donald Trump.

Breman, who took up the top role at RBNZ in December, joined central bank governors from around the world in releasing a statement on January 13 expressing their “full solidarity” with Powell and seeking to defend central bank independence. The bankers were alarmed, as the WSWS has explained, about the “vast implications” of Trump’s actions for the stability of the US and global financial system.

Peters sharply retorted on X the next day that Breman must “stay in her New Zealand lane and stick to domestic monetary policy.” This would have been the advice of the Ministry of Foreign Affairs and Trade, he said, “if the Governor had sought its advice, which she did not.” While acknowledging that the RBNZ is statutorily independent, Peters insisted it “has no role, nor should it involve itself, in US domestic politics.”

Peters’ extraordinary public rebuke was later echoed by National Party Prime Minister Christopher Luxon and Finance Minister Nicola Willis, who told the media that Breman should have consulted the Ministry of Foreign Affairs before making any comment on the US Fed.

The episode exposes the sham of “central bank independence” and lays bare the class interests at stake in monetary policy. Trump is acting on behalf of the most rapacious and outright criminal sections of the financial oligarchy he represents, which is demanding lower rates in order to finance highly speculative operations in crypto, real estate and other areas of the market in which it is embedded. Powell meanwhile represents the more traditional sections of Wall Street which fear the lower interest rates demanded by Trump will spark inflation and set off a wages movement by the working class.

Peters championed RBNZ “independence” when the Reserve Bank Act 1989 was enacted during the fourth Labour Party government’s right-wing restructuring. That legislation, designed to insulate monetary policy from “political interference,” established New Zealand as the first country to implement inflation targeting—a model subsequently adopted worldwide. Giving the NZRB “independence” with a mandate focused solely on price stability served to lock in a deflationary agenda that systematically prioritized the interests of finance capital over those of workers.

Now, the entire monetary policy framework is being retooled for a new round of austerity and war. Amid the deepening capitalist crisis, contesting sections of the ruling elite, finance capital and the state are fighting over who will control the levers of economic life. Powerful factions that have benefited from the flow of cheap money and speculative finance want a regime that keeps interest rates low to sustain debt-financed speculation.

The Luxon government’s rebuke of Breman amounts to an open endorsement of Trump’s campaign against the Fed, in keeping with its subservience to the Trump administration on imperialist geopolitics. Following the US military invasion of Venezuela, Peters issued an evasive statement that tacitly supported the illegal takeover. He has since remained silent over Trump’s demands to annex Greenland and threats of war against Iran.

As the entire NZ ruling elite lurches to the right amid an escalating social disaster and class tensions, Peters, leader of the populist NZ First Party in the governing coalition, invokes far-right Trump-style politics. These include declaring a “war on woke,” attacking democratic rights, demonising immigrants and denunciations of Marxism.

The government’s RBNZ intervention has provoked divisions within NZ’s establishment circles. Opposition Labour Party leader Chris Hipkins told Radio NZ: “I think the Reserve Bank governor is entitled to express her view on international developments.” Referring to the US attack on Venezuela and threats against Greenland, he said the government “could have been more visible and more principled on all of those issues, standing up for international laws.”

The last 2017–2023 Labour Party government, however, strengthened New Zealand’s alliance with US imperialism, including by sending troops to Britain to train conscripts for the NATO-led war against Russia in Ukraine.

Former Reserve Bank governor Don Brash, who is also a former leader of the National Party, backed Breman. Not to have signed the statement, he said, “would have been a bad mistake.” 

New Zealand Herald finance correspondent, Fran O’Sullivan also declared: “Bravo, Anna Breman,” describing her as “no political pushover” and praising her for holding her ground amid “considerable sledging.”

According to O’Sullivan, some of those now criticising the RBNZ head also opposed Willis’ appointment of Breman, the former deputy governor of Sweden’s central bank, the Riksbank. Following the resignation of Breman’s predecessor, Adrian Orr, she was cast by some as a “risky” outsider with no prior experience of the supposed “unique challenges” facing the New Zealand economy.

The last Labour government worked with Orr to impose the burden of the economic crisis triggered by COVID-19 on the backs of the working class. In line with the US Fed and other central banks, the RBNZ’s quantitative easing measures—the handing out of tens of billions of dollars to the banks—and ultra-low interest rates went hand-in-hand with government bailouts and tax concessions for big business.

Orr’s sudden resignation in March 2025 was shrouded in official deception and political manipulation. His departure was initially presented as a “personal decision” unrelated to any external pressure. Three months later, after sustained public criticism and Official Information Act requests, the RBNZ Board admitted he had resigned over Willis’ demands for a 25 percent cut to the bank’s operational budget.

The episode exposed the RBNZ Board as a pliant instrument of government pressure. Breman was quickly selected to stabilise the institution after Orrʼs ouster and to reassure international markets of its reliability.

The National Party-led government, which took office in late 2023, had early on targeted Orr for raising interest rates sharply in 2022, which Orr admitted in November 2022 was aimed at engineering a recession. While the RBNZ governor served as a convenient scapegoat, both the major capitalist parties agreed with Orr on the fundamental issue: that the working class must endure increased unemployment, reduced social services, and cuts to real wages in order to boost corporate profits.

The central issue is not whether monetary policy should be subject to political influence—it always has been—but rather which class interests will prevail. While Peters dovetails his pronouncements to accommodate Trump and the National-NZ First-ACT government orchestrates the resignation of Reserve Bank governors who don’t toe the line, the working class faces a deepening cost of living crisis.

The fundamental questions of economic life cannot be left to central bankers or any other section of the capitalist class. These decisions must be made democratically by the working class through workers’ governments committed to reorganizing economic life on socialist foundations. Workers can defend their interests only through the development of an independent political movement based on the program of socialist internationalism.