European Central Bank President Christine Lagarde warned that President Trump firing Powell or undermining the Fed’s independence is a serious economic risk. Lagarde emphasized that interference in the Fed’s independent monetary policy could have detrimental effects on the U.S. and global economy. Trump’s attempt to remove Fed Governor Lisa Cook is unprecedented in U.S. history and could lead to a Supreme Court clash. The Fed has refrained from cutting interest rates amid uncertainty over the impact of Trump’s tariffs on inflation. Powell hinted at a potential rate cut due to weak July jobs report and changing economic risks. Fed policymakers will assess inflation data and August jobs report ahead of their September meeting, where a rate cut is expected.

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