Christine Lagarde, president of the European Central Bank (ECB), comments on the last interest rate of the Central Bank to journalists.
Photo by Andreas Arnold/Picture Alliance through Getty Images
The president of the European Central Bank, Christine Lagarde, said Tuesday that she expected the perspective of the president of the United States, Donald Trump, to dismiss the president of the Federal Reserve, Jerome Powell, was not on the table.
When asked about CNBC’s demand if the scenario was a current material risk for markets, Lagarde said: “I certainly hope no … I hope it is not a risk.”
Speaking apart from the IMF spring meetings of the World Bank, Lagarde told CNBC that he would not comment on the market implications of an event that he expected “was not on the table.”
The president of the United States, Donald Trump, has been increasing the pressure on the president of the Fed, Jerome Powell, to reduce interest rates, warning that the economy of the United States could reduce the speed in another way.
In turn, last week, Powell had suggested that Trump’s commercial war could weigh on fuel growth and inflation. He did not indicate his expectations for the path of the interest rate ahead, but pointed out that “for the moment, we are well positioned to expect greater clarity before the consultations to find a policy position.”
Trump appointed Powell turning his first presidential mandate, but now he is investigating whether the Fed Chief can be legally fired before the term expires.
The ECB and the Fed have been diverging in monetary policy.
The central bank of the euro area has constantly reduced rates as inflation closes in its objective and economic growth of 2% in the block seems mediocre. Meanwhile, the Fed has maintained the stable rates this year, then and inacting three consecutive cuts between September and December last year.
Last week, it reduced interest rates in another 25 basic points, which makes its third reduction of 2025 and its seventh adjustment since it began to facilitate monetary policy last summer. In his monetary policy statement, the Central Bank warned about a Weaznd growth perspective linked to world commercial uncertainty fueled by the tariff policy of the president of the United States, Donald Trump.
