The president of the ECB Christine Lagarde yesterday launched a clear and direct warning: the moves of Donald Trump towards the Federal Reserve They represent "a very serious danger to the US and global economy." A direct warning that links finance and international politics, reminding investors that the Fed's independence is non-negotiable and that the stability of global markets remains a precious asset.
Lagarde sides with Powell and appreciates Italy
Last week, the US president fired Lisa Cook, a member of the Federal Reserve Board, announcing that "we will soon have a majority" in the body that decides the directions of American monetary policy. A move that did not go unnoticed by Christine Lagarde, who in an interview with Classical Radio He raised the alarm: if Trump were to oust Governor Jerome Powell or reduce him to a minority role, this would represent “a very serious danger” both for the American and global economies.
The ECB's head explained that the Fed's policy "obviously has an impact on the United States' ability to maintain price stability and ensure optimal employment." If American monetary policy "depended on the dictates of this or that, the balance of the American economy, and consequently the effects this would have on the world, would be very worrying." However, Lagarde reassured: it will be "very difficult" for Trump to gain control of the Fed thanks to the protections of the US Supreme Court, which “clearly indicated that a Federal Reserve governor can be removed only for gross negligence".
Shifting her gaze to Europe, Lagarde reiterates that “for all Eurozone countries It is absolutely essential to have a sustainable debt, a manageable debt" and that "it is clearly crucial to respect the rules that have been agreed" to stabilize the debt trajectory. Among the Member States, theItaly He receives applause: "Italy is making serious budgetary efforts today and will likely soon reach the 3% deficit target. So we would do well to take inspiration from this."
On the French banking front, Lagarde reassures: “I think that the French banking system be a well-capitalized system, much better off than it was during the last major financial crisis, well-structured, well-supervised, with responsible actors.” While not calling for IMF intervention, Lagarde emphasizes that “all the risks of government collapse in all eurozone countries are worrying” and clearly influence the markets' assessment of risks.
One last comment concerns the US-EU tariffsThe agreement has "considerably" reduced uncertainty, but a recent ruling by a federal appeals court has brought back "some uncertainty." The ECB president remains optimistic: "In my opinion, this additional uncertainty is quite positive, because I think we won't renegotiate above 15%. If we have a chance to negotiate below that, that would be very good."
