Trump's Fed Criticism Sparks Global Economic Concerns

The escalating rhetoric from U.S. President Donald Trump against the Federal Reserve has the potential to cause ripple effects across global financial markets. ECB policymaker Olli Rehn emphasized that questioning the Fed's independence could lead to increased inflation, highlighting concerns over the central bank's autonomy.

Rehn noted the unprecedented pressure Trump has placed on the Fed to lower interest rates, despite the institution's traditionally inviolable independence since the 1980s. He cautioned that a compromise on this principle might have significant global repercussions on both financial markets and the wider economy.

While Europe remains insulated due to its strong institutional framework, Rehn suggested that transatlantic financial pressures could indirectly affect the continent. He called for measures to strengthen confidence in the euro to maintain central bank independence in Europe.

(With inputs from agencies.)