In just seven months, Donald Trump has turned his return to the White House into a real toot pain for many. Its tariff policy against dozens of countries around the world and their strong pressure to the monetary policy of the Federal Reserve (FED) have caused an increase in the malaise of the main financial institutions.
In fact, in recent days, he has been the protagonist of fulminating the governor of the FED, Lisa Cook, appointed by former president Joe Biden in 2022. After asking for her resignation, she decided to cease her, accusing her of having committed a mortgage fraud. Despite this ,. A new step that has returned to question the total offensive of the new administration to the Independence of the Central Bank.
His bad relationship with the president of the US banks regulator- that he himself appointed in his first mandate- Jerome Powell, and his continuous messages against him and his government team, have raised the tension to the maximum. The message seems clear: Everyone who does not think how the Republican leader wants, must depart from his way.
An example of this is the dismissal of a few weeks ago of the person in charge of the Office of Labor Statistics, Erika Mtntarfer, for the bad employment data of Julio or its – “fool”, “useless” or “crazy” – for not lowering interest rates
But in this new stage against all and against everything, he seems to have encountered a well -known enemy, the president of the European Central Bank (ECB), Christine Lagarde. The leader of the European Financial Institution He took advantage of his last visit to Jackson Hole to join forces with the Fed and stand up to Trump.
Lagarde notice to Trump
Although in his speech of Jackson Hole he did not speak at any time about the difficult situation in which the relations between the White House and the Fed were, Lagarde did take the opportunity to dedicate a few words to what Trump was doing.
The president of the ECB supported Jerome Powell and her government team and warned that political power should not get into monetary policy, since that can be a serious danger to its independence.
Lagarde said that “The independence of any central bank has a crucial importance“And he stressed that” we must all give up “and” it is necessary to all the issues raised either the United States Congress, or the European Parliament. “” But, in any case, the independence of the central banks is vital, “he said.
The president of the European Financial Institution also defended that she lived something similar during her stage at the head of the International Monetary Fund (IMF) and spoke that she witnessed what happens in the central banks when “her independence is threatened”.
“The Central Bank becomes dysfunctional. It begins to do things that it should not do. And the next step is disruption. Instability, or even worse,” he justified, before reiterating that the independence of these institutions “It should be out of all debate“.
Lagarde’s words arrived a day after Powell dropped that something was close that Trump has been claiming from his return to the White House, a cut of interest rates. After paying off all the 2025 meetings with a maintenance of the money price, he said that in the September meeting the first descent of the year will be put on the table.
The analysts of the fintech Ebury ensures that Jerome Powell’s speech has changed some perspectives. “Concerns about a possible loss of independence of the Federal Reserve and a broader institutional deterioration They are compensated by the expectation of an earlier and more generous monetary stimulus of what was discounted just one week ago“They point out.
“The worldwide economic data has been transmitting more and more stagging signals for a long time. Unfrainting in job creation, less growth and persistently high inflation generate difficulties for the Federal Reserve“, they say. From Ebury they explain that, in parallel,”The political pressure exerted by Trump on the institution is increasing“.
The political pressure exerted by Trump on the institution is increasing
In case there was any doubt about a possible type cut, the president of the Fed of New York, John Williams, explained on Wednesday that “each meeting is open” and was optimistic. “The risks are more balanced. We will have to wait to see how the data evolves,” he said, before predicting what could be “Reduce interest rates and even leave them somewhat restrictive“.
The new ‘legal battle’ between Trump and the Fed
In addition to the insults, the live rifirrafe for a few weeks ago at the headquarters of the Fed and to press Jerome Powell to lower interest rates, Trump has also started a real battle against some of the faces of the regulator of US banks.
The last of the clashes has questioned the plans of the Republican leader. Last Monday he decided to dismiss Lisa Cook, accusing her of mortgage fraud. Something that Cook has denied and that has made his lawyer, Abbe Lowell, has filed a lawsuit against him, in an action that qualifies as “unprecedented and illegal.”
Although he was asked to leave his position, Trump decided on Monday to say goodbye through a letter disseminated in Truth Social: “For this, he is dismissed from his position at the Board of Governors of the Federal Reserve, with immediate effect“He said. In the brief, he defended that” at least, the behavior in question demonstrates serious negligence in financial transactions that question its competence and reliability as a financial regulator“.
“There are enough reasons to believe that you could have made false statements in one or more mortgage contracts. (…) You signed a document that attests that a property in Michigan would be your main residence during the next year. Two weeks later, he signed another document for a property in Georgia, declaring that it would be his main residence during the following year, “he accused.
Trump himself, in statements after the press, said that what the United States needs is “people who are 100% honest and don’t seem like it“. He also accused her of having” deceptive and potentially criminal behavior. “In the lawsuit filed by Cook’s lawyer, he defends that the White House’s accusation has no foundation on” private mortgage requests presented by Governor Cook before her confirmation in the Senate is not a cause. ”
“The letter of President Trump in which he intended to say goodbye to Governor Cook did not quote the appropriate reasons to dismiss her from the Board,” he justified. A new front that will end in the courts and that joins the dismissal of a few weeks ago of the head of Labor Statistics, Erika Mtntarfer, for the bad employment data.
The Republican President continues to win his particular war against the “Testarudo” and “Tardón” Powell and continues to put pressure to the US financial institution. But Christine Lagarde tends her hand to Jerome Powell against Trump and combine forces so that, at least until May 2026, the president of the Fed can remain in a position that is increasingly burning and there are still that “independence” that is being “threatened.”
