The president of the European Central Bank, Christine Lagarde, did not want to leave the United States without launching a message of support to her federal reserve counterpart, Jerome Powell, who has been converted to Donald Trump’s diatribes for months for not lowering interest rates.
Asked about this Sunday during an interview in the Fox News chain, Lagarde responded with subtlety, trying to elevate to the general the particular clash between the White House and the head of the Fed. And of course, without quoting Trump, which does not fit with the foods restrained with which Frankfurt is usually played, and also, he would immediately exhibit the republican fire from the republican. “The independence of any central bank is of vital importance,” said the French.
After landing this week in Jackson Hole (Wyoming), to participate in the traditional summer symposium organized by the Federal Reserve of Kansas City, Lagarde was completely integrated into the meeting of the meeting, whose theme this year was Labor markets in transition: demography, productivity and macroeconomic policy. During his Saturday speech he summoned Spain, from which he said he has benefited widely from the massive arrival of foreign workers, like countries like Germany.
In that intervention there were no mentions to the independence of the Federal Reserve, and the gesture was expected, due to the symbolism of doing so on American soil. He waited for this Sunday, at the last moment. And he threw memory for his evening criticism of what is happening in the US, where Trump’s insults to Powell have practically ceased to be surprised by his abundance and recurrence. “In my time of the International Monetary Fund I saw closely what happens when a central bank ceases to be independent, or when its independence is under threat. It becomes dysfunctional, it does things that should not. And the next step is disruption and instability, when not something worse,” he warned.
The conversation was developed in Fox News, a conservative television network, and when at one point the interviewer criticized that Powell introduced climate change in monetary policy, Lagarde came out Rauda and fast in his defense. “Part of our mission is to supervise the banks. And in that supervision our task is to check the risk of climate change to which they are exposed. If you grant mortgages for homes in the seaw front and there are flood risks, we must take it into account. It is pure risk management. And we are also doing that in the ECB.”
Powell has five meetings without lowering interest rates. And he has not done so since Trump arrived at the White House, something that the US president believes that prevents the economy from achieving its full potential, because cheap financing for homes and companies tends to stimulate consumption and investment, and reduces mortgage quotas at a time of stagnation for the real estate sector.
However, the president of the Fed dropped this Thursday that will cut the types at the September meeting, because the cooling of the labor market is advancing inflation in the list of concerns, even when tariffs are already generating extra costs in business giants such as Walmart. The announcement, as expected, did not impress Trump. “We call you late for something. It’s too late.”
Russia’s money
The Powell case was not the only issue of the interview. Asked about the 300,000 million dollars in Russian assets frozen by Europe, the BCE president said they have ensured that this money is still frozen and unable to be used by Russia. In addition, it is legitimate that the interests generated by that capital is used to return the loans of the EU and USA to Ukraine. “And that does not violate the principle of sovereignty of assets. My hope is that both that money is used to repair the damage caused to Ukraine,” he added.
On the fact that Europe continues to buy energy from Russia despite the bloody war against Ukraine, Lagarde replied that more and more oil and oil buy from the United States, Norway and other countries, and that they will continue to reduce purchases to Russia.
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