Washington (AFP) – European Central Bank chief Christine Lagarde said Tuesday that she hoped US President Donald Trump would not oust the country’s central bank boss Jerome Powell prematurely. Her comments came as Trump has escalated attacks on the Federal Reserve chief, most recently berating Powell for not cutting interest rates, days after threatening his job. Wall Street stocks tumbled Monday on Trump’s latest remarks.
Asked about the possibility that the US executive branch tries to fire Powell before the end of his term, Lagarde told CNBC she hoped this situation was “not on the table.” She declined to comment on market reactions to hypotheticals, but said she hopes “that it is not a risk,” speaking on the sidelines of the International Monetary Fund and World Bank Spring Meetings in Washington.
On Thursday, Trump insisted he could force out Powell, saying the Fed chair would “leave if I ask him to.” The US president does not have direct authority to fire Federal Reserve governors, but Trump could initiate a lengthy process to attempt to unseat Powell by proving there was cause to do so. Powell had earlier warned that Trump’s sweeping tariffs on US trading partners could put the Fed in an unenviable position of having to choose between tackling inflation and unemployment.
Lagarde told CNBC on Tuesday: “We’re both used to political pressure in one way or the other.” She said she had “immense respect” for Powell’s work and ability to be as diligent and disciplined as possible, and to deliver on his dual mandate of keeping inflation and unemployment in check. “For him, I think I’m sure, as it is for me, the mandate is our compass. We have to deliver on our mandate,” she added.
Since returning to the presidency, Trump has imposed wide-ranging tariffs on friend and foe, slapping a new 10 percent levy on most trading partners while imposing especially steep rates on goods from China. With Trump’s new tariffs imposed this year, many products imported from China now face an additional 145 percent tariff.
“I hope that a trade deal will be something that can be considered by both partners, the United States and China,” Lagarde said Tuesday. Between the European Union and the United States too, she added: “I am sure that there is scope for negotiations.”
© 2024 AFP
