Headlines
ECB's Lagarde warns of risk to world economy via Trump interference on Fed
Published by Global Banking and Finance Review
Posted on September 1, 2025
1 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 1, 2025
1 min readLast updated: January 22, 2026
Lagarde warns that Trump's interference with Fed leadership could pose serious risks to U.S. and global economies, stressing the need for monetary policy independence.
PARIS (Reuters) -If U.S. President Donald Trump removed Federal Reserve Chairman Jerome Powell or Fed governor Lisa Cook, then this would represent a "very serious danger for the U.S. economy and the world economy", the European Central Bank President Christine Lagarde said on Monday.
Speaking to French broadcaster Radio Classique in an interview, Lagarde said: "If U.S. monetary policy were no longer independent and instead dependent on the dictates of this or that person, then I believe that the effect on the balance of the American economy could, as a result of the effects this would have around the world, be very worrying, because it is the largest economy in the world."
Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting the short-term interest rate and threatened to fire him. Trump is also attempting to fire Federal Reserve Governor Lisa Cook.
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta)
Monetary policy refers to the actions undertaken by a nation's central bank to control the money supply and interest rates to achieve macroeconomic goals such as controlling inflation, consumption, growth, and liquidity.
The Federal Reserve, often referred to as the Fed, is the central bank of the United States, responsible for implementing monetary policy, regulating banks, maintaining financial stability, and providing financial services.
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real gross domestic product (GDP).
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