European Central Bank President Christine Lagarde on Tuesday said she hoped that U.S. President Donald Trump firing Federal Reserve Chair Jerome Powell was not a scenario on the table.
Asked by CNBC’s Sara Eisen whether Trump finding a way to remove the central bank chief was a material risk to markets, Lagarde said: “I very much hope not … I hope that it is not a risk.”
Trump appointed Powell during his first presidential mandate, but is now looking into whether the Fed chief can legally be sacked before his term expires. Powell has previously said he does not believe the president can fire him legally.
Speaking on the sidelines of the IMF World Bank Spring Meetings, Lagarde told CNBC that she would not comment on the market implications of “hypotheticals that I hope are just not on the table.”
Trump has been ramping up pressure on Powell to reduce interest rates, warning the U.S. economy could slow down otherwise.
Powell in turn last week suggested that Trump’s trade war could weigh on growth and fuel inflation. He did not indicate his expectations for the interest rate path ahead, but noted that “for the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”
Lagarde told CNBC on Tuesday: “We’re both used to political pressure in one way or the other.”
“I have immense respect for the work that he does, and for his loyalty to his job and to being as diligent, disciplined as possible to deliver on his mandate. For him, I think, I’m sure as it is for me, the mandate is our compass. We have to deliver on our mandate.”
