Why and how has ECB’s Lagarde commented on Fed’s independence?

Christine Lagarde, President of the European Central Bank (ECB), commented on the U.S. Federal Reserve’s (Fed) independence during an exclusive interview on France’s Radio Classique on September 1, 2025.

How She Commented

Lagarde made her remarks in the context of a broader discussion on economic stability, central banking, and political influences, where she was asked about potential U.S. political interference in monetary policy. She specifically addressed criticisms and pressures from former U.S. President Donald Trump, who has publicly threatened to dismiss Fed officials (such as Chair Jerome Powell) and exert more control over the central bank to influence decisions like interest rate cuts for growth and employment. Her comments were reported widely in media outlets on the same day, framing them as a warning against undermining central bank autonomy.

What’s Behind Lagarde’s Comments?

Lagarde expressed deep concern that any loss of Fed independence—such as through indirect political control or appointments—would represent “a very serious danger for the American economy and the world economy.” She emphasized that central banks like the Fed must remain independent to maintain economic equilibrium and avoid responding to political dictates, which could lead to instability in the U.S. and ripple effects globally.

This was in direct response to Trump’s ongoing “war” on the Fed, including his threats to revoke officials’ positions or influence policy, which she described as “very worrying.” Lagarde also noted the U.S. Supreme Court’s role in protecting such independence (by ruling that Fed governors can only be removed for serious misconduct), but warned that political pressures on the court itself could erode the rule of law. Her statements underscore the importance of central bank autonomy for price stability and broader economic health, especially amid U.S. political uncertainties.