Trump's war on Fed a threat to world economy, warns Lagarde

Donald Trump's attempt to influence the US Federal Reserve could pose a "very serious danger" for the world economy, the head of the European Central Bank has warned.

- Richard Partington

Christine Lagarde, the president of the ECB, said Trump undermining the independence of the world's most powerful central bank would have an impact for the US and other countries.

Steps by the US president to remove the Fed chair, Jerome Powell, or the governor Lisa Cook would be a "very serious danger for the US economy and the world economy", Lagarde told the French broadcaster Radio Classique.

"If US monetary policy were no longer independent and instead dependent on the dictates of this or that person, then I believe that the effect on the balance of the American economy could, as a result of the effects this would have around the world, be very worrying, because it is the largest economy in the world," she said, according to Reuters.

Trump has repeatedly criticised Powell for not cutting interest rates and has threatened to sack him.