Lagarde says Trump’s Fed interference poses serious global danger
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The news: European Central Bank President Christine Lagarde said steps by US President Donald Trump to remove US Federal Reserve officials would represent a “very serious danger for the US economy and the world economy.”
In an interview with France’s Radio Classique, Lagarde said it would be “very worrying” if Trump succeeded in taking control of the US central bank, warning this could put the Fed’s independence at risk and have serious repercussions globally.
"If that policy wasn't independent anymore, if it was dependent on political diktats from one person or another, then the balance of the US economy - and consequently the impacts that has on the world as a whole, because it is the world's largest economy, would be very worrying," Lagarde said.
The context: Her comments follow Trump’s move last month to fire Fed Governor Lisa Cook and repeated attacks on Chair Jerome Powell over interest rates.
A recent US court ruling against Trump-era tariffs adds “a further layer of uncertainty,” she said.
Lagarde also said “all risks of governments falling in all euro area countries are worrying,” after being asked about France, where the government faces a confidence vote on 8 September as opposition parties refuse to back Prime Minister Francois Bayrou’s spending cuts and tax increases.
She said France was a “respected” borrower, but that it had become associated with a risk premium, with the additional cost for its debt now just below Italy’s.
The sources: BBC, Reuters, The Wall Street Journal
