President Donald Trump’s pressure for interest-rate cuts threatens the independence of the Federal Reserve, former Fed Vice Chair Stanley Fischer warned.
Speaking at the European Central Bank Forum in Sintra, Portugal, Fischer said the U.S. economy “is doing reasonably well, but you wouldn’t know that if you listen to the president of the United States.” He said lower borrowing costs would boost employment — in an already strong labor market — but at the cost of a mortal blow to the U.S. central bank.
“It would destroy the independence of the Fed,” Fischer, who left in 2017, said during a panel discussion with ECB President Mario Draghi and Bank of England Governor Mark Carney. “It’s not something that should be done.”