Overview
- Speaking on Sept. 1, ECB President Christine Lagarde said politicizing U.S. monetary policy would endanger the American economy and transmit risks worldwide.
- Lagarde stressed that Federal Reserve independence is crucial for maintaining price stability and supporting optimal employment in the United States.
- She cited a U.S. Supreme Court precedent that allows removal of a Fed governor only for grave misconduct, saying that makes it hard to reshape the board’s majority.
- News reports note that President Trump has pressed for rate cuts, attacked Chair Jerome Powell, and is seeking the removal of Governor Lisa Cook over alleged mortgage misrepresentations.
- Lagarde also flagged that potential government collapses in euro-area countries concern markets, while adding that France does not meet conditions for IMF intervention.