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The Fed's independence is frequently threatened. Even this Draghi can't stand it anymore!

April 15, 2019 10:50
source: Global Forex

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According to reports, as the independence of the Fed is frequently threatened by US President Trump, this time even the European Central Bank President Draghi can't stand it!

  Draghi International in Washington on SaturdayMonetary FundThe organization (IMF) told reporters at the spring meeting that he "really worried about the independence of the central bank", especially "the most important jurisdiction in the world."

  In view of the fact that central bank officials are often reluctant to comment on events in politics or the economy that are not related to them, Draghi’s move is worth noting.


A key topic discussed at the IMF meeting is how much freedom the central bank has in the face of political interference. US President Trump’s recent nomination of two Fed governors has sparked public opinion about the independence of the Fed. Trump's two candidates have supported his ruling philosophy. Since the US stock market fell in the fourth quarter of last year, Trump began to intensively comment on the Fed's policy, saying that the Fed's frequent rate hike is a disconnect from the market.

"If the central bank is not independent, then people may thinkcurrencyPolicy decisions follow political advice rather than an objective assessment of the economic outlook,” Draghi said. “The central bank should be free to choose the best way to achieve its mission. ”

Also on Saturday, when asked at the press conference about other pressures on the Fed’s candidates and the central bank, IMF Chairman Lagarde said that for the central bank, “independence has been serving them well and hopes. Can continue this way."

  It is worth mentioning that, according to reports, at the closed meeting with the Democratic House of Representatives on Thursday night, Federal Reserve Chairman Jerome Powell reiterated the independence of the Fed and said that he would not be president Trump or him. A possible Fed governor nominee may be asked to comment.

According to a member who listened to Powell’s speech at the closed-door meeting, Powell made it clear that he believed that the Fed’s chairmanship should not be influenced by politics, and he cherished the independence of the Fed. Powell interviewed the Ohio Democrat Rep. Joyce Beatty and then answered questions from the Democratic House of Representatives. The House Financial Services Committee is led by Beatty.

According to Jim Himes, a Connecticut Democrat who is also a member of the House Financial Services Committee, Powell said the Fed does not support any party and will not be affected by political pressure. Powell also said that he would not discuss the former restaurant industry executive Herman Cain or former Trump campaign team consultant Stephen Moore. Trump had previously hinted that the plan was to nominate the two men as members of the Fed.

(Article source: Global Forex Network)

                (Editor: DF381)

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