ECB Official Warns of Global Fallout from Trump's Fed Attacks

According to a speech given by European Central Bank (ECB) policymaker Olli Rehn on August 27, 2025, President Donald Trump's ongoing criticism of the U.S. Federal Reserve could have substantial and far-reaching global consequences. Rehn, who is also the governor of Finland's central bank, stated that the uncertainty surrounding the world's most important monetary authority has risen this year as Trump repeatedly attacked Fed Chair Jerome Powell and announced the firing of one of the Fed's governors, Lisa Cook.

Rehn warned that the principle of central bank independence, which has been an inviolable tenet since the 1980s, is now "wobbling badly." He cautioned that this could lead to "substantial, global knock-on effects on both the financial markets and the real economy." To avoid a similar deterioration of central bank autonomy in Europe, Rehn urged Europeans to take action to boost global confidence in the euro as a safe currency.

The ECB policymaker noted that while the euro area's growth has proved more resilient than expected, inflation is set to slow below the 2% target in the short term due to factors like cheaper energy, a stronger euro, and a slowdown in services inflation. Rehn stated that the ECB's Governing Council is closely monitoring the economic situation and stands ready to act if needed.