⚠️ Lagarde Warns: Threat to Fed Independence Poses Global Risk
European Central Bank chief Christine Lagarde has cautioned that undermining the independence of the U.S. Federal Reserve would be a “very serious danger” for the global economy.
She stressed that if the Fed were forced to bend to political demands, it could have a “very worrying” impact on U.S. economic stability — with ripple effects worldwide.
Since taking office, President Donald Trump has repeatedly clashed with Fed Chair Jerome Powell and even attempted to dismiss Fed Governor Lisa Cook last month.
Lagarde noted that, in practice, it remains “difficult” for any president to directly impose control over the central bank.
📌 About the Fed:
The Federal Reserve, America’s central bank, is tasked with promoting employment and ensuring price stability. It sets interest rate policy independently of the U.S. government — though its moves often spark political backlash.
Trump, both in his first term and since returning to office in January, has openly pushed for deep interest rate cuts. He argues they would fuel growth and reduce government borrowing costs.
Currently, the Fed’s benchmark rate stands between 4.25% and 4.5%. Trump wants it slashed to below 1%.