European Central Bank (ECB) President Christine Lagarde has warned that a takeover of US monetary policy by US President Donald Trump would pose "a very serious danger" to both the American and global economies.
Speaking to Radio Classique on Monday, Lagarde noted that the Federal Reserve (Fed) plays a critical role in maintaining price stability and maximising employment in the US. She stressed that the Fed’s decisions inevitably have widespread consequences beyond the United States.
"If monetary policy were dictated at the whim of any individual," she said, "the balance of the American economy—and by extension, the global economy—would be deeply concerning."
Lagarde acknowledged, however, that Trump would face significant legal hurdles in any such attempt. She pointed out that the US Supreme Court, a widely respected institution, has explicitly ruled that a Federal Reserve governor can only be removed for "serious misconduct."
"It would take an extraordinary overreach to meet that threshold," Lagarde added.
Trump has frequently criticised the Federal Reserve, calling for lower interest rates and publicly clashing with its leadership.
Despite having personally appointed Fed Chair Jerome Powell during his first term, Trump has spent months attacking him and is now reportedly seeking to remove Governor Lisa Cook.
Cook has been accused by Trump’s allies of providing false information to secure favourable mortgage terms. However, no concrete evidence of such a violation has emerged.
Lagarde’s remarks underline the potential risks of political interference in central bank independence, a cornerstone for economic stability globally.
