• Lagarde warns that Trump's attempts to control the Fed could endanger global economic stability.
• The ECB President highlighted the risks to U.S. monetary policy independence.
• Legal hurdles make it difficult for Trump to exert control over the Federal Reserve.

Christine Lagarde, President of the European Central Bank (ECB), has issued a strong warning regarding the potential repercussions of U.S. President Donald Trump's efforts to undermine the independence of the Federal Reserve (Fed). Lagarde stated that if the Fed were forced to adhere to political pressures, it would represent a "very serious danger" to both the U.S. and global economy, as the United States is the world's largest economy. She mentioned that such a scenario could result in significant instability, affecting monetary policy aimed at maintaining price stability and optimal employment, according to Reuters and South China Morning Post.

Lagarde emphasized that Trump's longstanding criticism of Fed Chair Jerome Powell and his attempts to remove Fed Governor Lisa Cook raise serious concerns about the politicization of U.S. monetary policy. She remarked that if the Fed became beholden to one person's directives, the economic balance could be severely disrupted, which would have far-reaching global consequences. Moreover, she cited legal constraints that would complicate any attempt by Trump to assert control over the Fed, noting that the Supreme Court has established that governors can only be dismissed for gross misconduct, according to BBC and Business Insider.

Despite these warnings, the possibility of Trump succeeding in undermining the Fed's structure remains a concern for investors and economic analysts. Following recent threats against officials like Cook, who has contested her potential dismissal in court, there is increasing unease in financial markets regarding the Fed's future independence. Lagarde's remarks reflect broader anxieties shared by various financial leaders, indicating potential risks to the U.S. dollar and the overall monetary system should Trump's actions go unchecked, as expressed by multiple sources, including Reuters, South China Morning Post, BBC, and Business Insider.