LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Wednesday he was “very concerned” about threats to the U.S. Federal Reserve’s independence, describing it as a “very serious” issue. Bailey was appearing before parliament’s Treasury Committee when he was asked for his views on the pressure being applied by U.S. President Donald Trump on […]
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BoE’s Bailey ‘very concerned’ about threats to US Fed independence
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LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Wednesday he was “very concerned” about threats to the U.S. Federal Reserve’s independence, describing it as a “very serious” issue.
Bailey was appearing before parliament’s Treasury Committee when he was asked for his views on the pressure being applied by U.S. President Donald Trump on the Fed to cut interest rates.
Trump has publicly discussed firing Fed Chair Jerome Powell and in a sharp escalation last month, he also attempted to fire Fed Governor Lisa Cook, setting off a critical legal test over the Fed’s ability to function without political interference.
“This is a very serious situation, I am very concerned,” Bailey told the committee. “The Federal Reserve … has built up a very strong reputation for independence and for its decision making.”
Bailey said he took any threats to central bank independence “very seriously” and that trading that independence against other government decisions would be a “very dangerous road to go down”.
“I think monetary stability and financial stability … underpin the foundations of policy,” Bailey said.
“If we do those things, we enable you then to go off and take decisions in the areas that, appropriately, governments and parliament should take,” he said, addressing lawmakers on the committee.
(Reporting by David Milliken, Writing by Sachin Ravikumar; Editing by Kate Holton)