The Fed’s monetary policy affects the United States “to maintain price stability and to ensure optimal employment,” continued Lagarde. “If you have the dictation of one person or another, (…) would be the balance of the American economy and consequently the effects that this would have worldwide, very worrying.” At the same time, however, it would be “very difficult” for Trump to achieve a majority in favor of the policy he wanted in the central bank’s Seven Governor Council, the ECB President said.
Trump has been crossing the Fed for months because she has not yet fulfilled his demand for a key interest rate. The head of the central bank, Jerome Powell, repeatedly attacked the US President verbally. A week ago, Trump also ordered the relief of the US Federal Reserve Gouvene Lisa Cook and justified them with alleged wrong information Cooks in connection with private real estate loans. Cook immediately rejected the arrangement and is in court against dismissal.
The US President only has limited powers for personnel issues at the central bank Fed. According to a judgment of the Supreme Court, he can only relieve representatives of the central bank in the event of serious misconduct. Cook, a former employee of ex-President Barack Obama, has been a member of the central bank’s Seven Government Council since May 2022. She is the first black woman on this post and was appointed by Trump’s predecessor Joe Biden.
