Lagarde Sounds Alarm: Trump’s Fed Meddling Poses ‘Serious Danger’ to Global Economy

European Central Bank President Christine Lagarde has issued a grave warning, stating that any attempt by President Donald Trump to undermine the independence of the US Federal Reserve would present a “very serious danger” to the global economy. Lagarde emphasized that forcing the Fed to yield to political directives would have profoundly “worrying” consequences for economic stability, not just within the United States but worldwide.

The warning comes amidst heightened tensions between the White House and the independent central bank. President Trump, who returned to office in January, has a well-documented history of criticizing Fed Chair Jerome Powell and recently sought to dismiss Governor Lisa Cook. These actions underscore his ongoing efforts to influence the institution‘s monetary policy decisions.

The Federal Reserve’s mandate is to foster maximum employment and price stability, primarily through setting interest rates. Despite its intended independence, Trump has repeatedly called for drastic cuts to the current target rate of 4.25%-4.5%, advocating for a reduction below 1% to stimulate economic growth and reduce government borrowing costs. However, the Fed has maintained rates since December of last year, citing persistent inflation concerns, which could be compounded by Trump’s trade tariffs.

While a modest interest rate cut is broadly anticipated later this month, it is widely believed that it will fall short of the President’s demands, suggesting the contentious relationship between the administration and the central bank is likely to continue.

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