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European Central Bank Chief Warns of Global Economic Risks Posed by Trump's Fed Attacks

Strategic Insights

— 1 min read

Christine Lagarde, the chief of the European Central Bank, has expressed alarm over US President Donald Trump's repeated attacks on the Federal Reserve and its chairman, Jerome Powell. Trump's criticism and public flirtation with firing Powell poses a "very serious danger" to the global economy, Lagarde warned. The attacks have already had a significant impact on financial markets, with the dollar 10pc lower against a basket of currencies so far this year. Lagarde also warned of the risks of government collapse in France, where a confidence vote is expected to lead to a new government or elections.

Key Takeaways:

  • Christine Lagarde, European Central Bank chief, has warned of the dangers of Donald Trump's attacks on the Federal Reserve, describing them as a "very serious danger" to the global economy.
  • Trump's criticism of Fed Chairman Jerome Powell has already had a significant impact on financial markets, with the dollar 10pc lower against a basket of currencies so far this year.
  • Lagarde stated that US monetary policy independence is crucial, and Trump's interference could have worrying effects on the global economy.
  • The attacks on the Fed have added a "further layer of uncertainty" to the global economic outlook, according to Lagarde.
  • A US appeals court ruling that most of Trump's tariffs were illegal has also increased uncertainty.
  • Lagarde warned of the risks facing France as the government nears collapse, with Prime Minister Francois Bayrou calling a confidence vote next week.
  • Markets have responded by selling French debt, driving bond yields higher.
  • Lagarde described the risks of government collapse in any eurozone country as "worrying."

Statistics:

  • The dollar is 10pc lower against a basket of currencies so far this year.
  • The value of the dollar has been affected by Trump's attacks on the Fed.
  • US monetary policy independence is crucial for a stable global economy.

Sources:

  • THE chief of the European Central Bank yesterday sounded the alarm over Donald Trump's war on the US Federal Reserve.

- [THE]

  • Christine Lagarde said the US President's attacks posed 'a very serious danger' for the global economy.

- [THE]

  • Christine Lagarde (pictured) intervened to warn of the dangers of the US President's intervention.

- [Radio Classique]

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