#TrumpVsPowell #Powell

French officials have expressed significant concerns over the potential removal of U.S. Federal Reserve Chair Jerome Powell, emphasizing the possible repercussions for global economic stability.​

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🇫🇷 France's Perspective

French Finance Minister Eric Lombard warned that dismissing Powell could undermine the credibility of the U.S. dollar and destabilize the global economy. He noted that President Donald Trump's previous tariff policies had already impacted the dollar's credibility, and removing Powell would exacerbate these issues, potentially affecting bond markets and investor confidence. ​

François Villeroy de Galhau, Governor of the Banque de France and European Central Bank policymaker, praised Powell as an exemplary central banker. He commended Powell's independence and professionalism, highlighting his resistance to political pressure and commitment to transparent communication about the U.S. economy. Villeroy emphasized that a central banker's role is to convey the truth independently, a standard he believes Powell upholds. ​

⚖️ Legal and Market Implications

The legality of firing a Federal Reserve Chair is complex; the law permits removal only "for cause," and policy disagreements may not meet this criterion. Market analysts caution that such an action could lead to financial instability, including stock market volatility and a weakened dollar. Senator Elizabeth Warren has also voiced concerns, suggesting that interfering with the Fed's independence could precipitate a market crisis. ​

🌍 Global Economic Impact

The international response underscores the interconnectedness of global economies and the importance of central bank independence. France's apprehension reflects broader concerns about maintaining financial stability and investor confidence amid potential political interventions in monetary policy.