Christine Lagarde, President of the European Central Bank, expressed concern about the possibility that US President Donald Trump gained control over the US currency policy and described the prospect as “very serious danger” for the American and global economies.
In an interview with the French radio class, Lagarde warned on Monday that undermining the independence of the federal reserve system could destabilize systems around the world.
Lagard’s comments come in the middle of the growing control of Trump’s efforts to transform the federal reserve system. Trump is trying to remove the Governor of the Federal Reserve Lisa Cook, critics who say it is an effort to fulfill the central bank officials who would more pressure at lower interest rates, AFP informed.
Trump also nominated Stephen Mirana, one of his best economic advisors to temporarily fill the unoccupied chair after a surprising resignation of Governor Adriana Kugler. Miran was openly critical of the recent Fed actions and is often credited as a “mind” under Trump’s economic policy, including tariffs in other countries.
The importance of the central bank’s independence
Lagarde emphasized the importance of the central bank’s independence while maintaining economic stability. She noted that central bank policy is designed to ensure price stability and support “optimal” jobs.
The head of the bank warned that if the decision of the central bank dictated Trump’s dictations, it would disrupt the US economy.
“If it depended on the dictates of one or the other … the balance of the American economy and consequently the effects that it would have for the world would be very worrying,” she said, as AFP quoted.
Can Trump get control?
While Lagarde acknowledged the risks that Trump had taken over the decision -making power of the federal reserve system, she also said that Trump was “very difficult to” swing the majority of “the Fed policy authority in its favor.
But she also said, “If he was to succeed, it would be a very serious danger to the US economy and the world economy.”
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