European Central Bank President Christine Lagarde has cautioned that Donald Trump’s efforts to influence the U.S. Federal Reserve pose a “serious danger” to both the American and global economy.
Lagarde emphasized that undermining the independence of the world’s most powerful central bank would not only destabilize the U.S. economy but also create ripple effects worldwide. She warned that attempts to remove Fed Chair Jerome Powell or Governor Lisa Cook could erode trust in monetary policy at a critical moment.
Trump has repeatedly criticized Powell for not cutting interest rates and has sought to remove Cook, whose term runs until 2038. Cook is challenging the attempt in court, arguing the president has no legal authority to dismiss her without cause. Her removal would allow Trump to appoint a replacement, raising further concerns about political interference in central banking.
Lagarde noted that U.S. monetary policy must remain independent to ensure economic stability. She stressed that the Supreme Court has previously ruled that Fed governors can only be dismissed in cases of gross misconduct, making unilateral removal attempts highly contentious.
Economists and investors have also warned that political pressure on the Fed could undermine its credibility in controlling inflation and managing borrowing costs, at a time when global markets are already facing uncertainty.
