The ECB's official warns of risks to the independence of the Federal Reserve

According to BlockBeats, Olli Rehn, a member of the Governing Council of the European Central Bank and Governor of the Bank of Finland, expressed concern about the challenges facing the independence of the Federal Reserve, which poses a significant risk to markets and the economy. Rehn emphasized that since controlling double-digit inflation in the 1980s, the independence of the Federal Reserve has been considered an inviolable principle. However, this principle is now under threat.

Rehn highlighted that when central banks are trusted, society, business, and financial markets believe in their commitment to maintaining price stability. This trust solidifies inflation expectations. He noted that the authority derived from independence enhances the effectiveness of monetary policy, allowing central banks to avoid sharp reactions to temporary economic disruptions.