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Investing.com -- European Central Bank policymaker Olli Rehn cautioned on Thursday that mounting pressure from President Donald Trump on the U.S. Federal Reserve could have far-reaching repercussions for global markets and the broader economy.
Speaking in a speech, the Finnish central bank governor noted that Trump has been urging the Fed to lower interest rates for an extended period, a stance that threatens the bank’s long-standing independence.
Rehn stressed that the Fed’s autonomy has been a cornerstone since the early 1980s, but warned this principle is now “wobbling badly,” raising the risk of significant worldwide spillovers.
He called on Europe to reinforce trust in the euro as a safe-haven currency, saying this would help guard against similar political interference with monetary policy in the region.
Linking the ECB’s independence to its policy success, Rehn highlighted that euro-area inflation reaching the 2% target was “no mere coincidence,” adding that the Governing Council is “closely monitoring the economic situation and stands ready to act if needed.”
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