European Central Bank president Christine Lagarde says Trump undermining Federal Reserve could impact global economy. Key US politics stories from Monday 1 September
US treasury secretary Scott Bessent has said the Federal Reserve is and should be independent but that it had “made a lot of mistakes”, as he defended Donald Trump’s right to fire the central bank governor Lisa Cook.
The president has criticised the Fed and its chair, Jerome Powell, for months for not lowering interest rates. Independent central banks are widely seen as crucial to a stable global financial system. Bessent also rejected the idea that markets were disturbed by the Trump administration’s actions. “S&P’s at a new high and bond yields are fine, so we haven’t seen anything yet,” he said.
Bessent’s comments come as Christine Lagarde, the president of the European Central Bank (ECB), said Trump undermining the independence of the world’s most powerful central bank could pose a “very serious danger” for the world economy.
Lagarde, who was France’s finance minister until 2011 before leaving to run the International Monetary Fund, said it would be “very difficult” for Trump to take control of Fed decision-making on interest rates, but such a scenario would be highly dangerous.
