European Central Bank President Christine Lagarde has expressed concern over the potential consequences of US President Donald Trump gaining control over US monetary policy.
In an interview with a French media, Lagarde warned that if Trump were to succeed in influencing the Federal Reserve’s decision-making process, it would pose a “very serious danger” to both the US and global economies.
Lagarde emphasized the importance of central bank independence in maintaining economic stability. She noted that the Fed’s policies are designed to ensure price stability and promote “optimal” employment.
If the central bank’s decisions were dictated by Trump’s diktats, Lagarde believes that “the balance of the US economy, and consequently the effects it would have on the entire world, would be very worrying.”
Trump’s efforts to remove Federal Reserve Governor Lisa Cook have sparked criticism, with some arguing that he aims to fill the central bank with officials who will support his calls for lower interest rates.
Lagarde acknowledged that it would be “very difficult” for Trump to completely swing the majority of the Fed’s policymaking body in his favor. However, she stressed that if he were to succeed, the consequences for the US and global economies would be severe.
The ECB chief’s comments come amid growing scrutiny of Trump’s economic policies and their potential impact on the global economy.
Trump’s attack on the Fed’s independence has raised concerns about the potential destabilization of financial markets and the erosion of the central bank’s credibility.
Lagarde’s warning highlights the importance of maintaining the independence of central banks to ensure economic stability and prevent potential crises.
In her statement, Lagarde underscored the significance of the Fed’s autonomy in setting monetary policy, free from political interference.
The ECB chief’s remarks serve as a reminder of the potential risks associated with Trump’s economic agenda and the need for the Fed to maintain its independence to ensure the stability of the US and global economies.
European Central Bank President Christine Lagarde has sounded the alarm on the potential dangers of US President Donald Trump gaining control over US monetary policy.
According to Lagarde, Trump’s efforts to influence the Federal Reserve’s decision-making process could pose a “very serious danger” to both the US and global economies.
Lagarde emphasized the importance of central bank independence in maintaining economic stability. She warned that if the Fed’s decisions were dictated by Trump’s administration, it would disrupt the US economy and have far-reaching consequences for the world.
The ECB chief’s concerns are rooted in the potential for politically motivated decision-making, which could prioritize short-term gains over long-term economic stability.
Trump’s attempts to remove Federal Reserve Governor Lisa Cook and appoint Stephen Miran, a top economic adviser, to a vacant seat have sparked criticism.
Critics argue that Trump’s goal is to fill the central bank with officials who will support his calls for lower interest rates, potentially undermining the Fed’s independence.
The potential consequences of Trump’s actions are far-reaching, with implications for global economic stability.
Lagarde noted that the Fed’s policies affect not only the US economy but also have a significant impact on the global economy.
If Trump’s administration were to gain control over monetary policy, it could lead to a destabilization of financial markets and undermine the credibility of central banks.