Bailey: Trump's Attack on the Fed Poses Global Risks

Bailey's Critical Warning

The Governor of the Bank of England (BoE) Andrew Bailey evaluated the impact of former US President Donald Trump's criticisms of Fed Chairman Jerome Powell on central banks. Bailey described the support of other central banks for Powell as 'very unprecedented,' emphasizing the need to consider the global impact of the US.

Risk of Spillover and External Influences

Bailey stated in his remarks to members of the Parliament Treasury Committee, "There is a very significant area for spillover. Events occurring in the US, particularly threats to the independence of the Fed, could lead to important externalities."

BoE's Support and Domestic Political Differences

The BoE was among the central banks that signed a statement supporting Powell, indicating that they are "in full solidarity." However, Bailey expressed that he does not see similar threats to the BoE in domestic politics.

Geopolitical Uncertainty and Market Stability

Despite the increased geopolitical tensions with Trump's potential return to the presidency, he noted that growth and stability in the markets have been more solid than expected. However, he expressed concern that geopolitical uncertainties have affected market reactions less than anticipated, which has troubled him.