Former Treasury Secretary Warns of Risks to Fed Independence

Lawrence Summers, former US Treasury Secretary, warned that investors may be underestimating the risks to the Federal Reserve’s independence. He highlighted that current calm conditions could quickly change, citing a potential credibility crisis for the central bank. Summers pointed to President Trump’s recent actions as contributing factors, including his calls for interest rate cuts and aggressive rhetoric towards Chair Jerome Powell, along with efforts to remove Governor Lisa Cook without due process. He emphasized the unprecedented nature of these moves, arguing that they constitute an attack on the Fed’s governance.