ECB Official Warns of Risks to Federal Reserve's Independence

According to BlockBeats, Olli Rehn, a member of the European Central Bank's governing council and Governor of the Bank of Finland, expressed concerns on Thursday about the challenges facing the Federal Reserve's independence, marking a significant risk to markets and the economy. Rehn highlighted that since the double-digit inflation of the 1980s was controlled, the independence of the Federal Reserve has been regarded as an inviolable principle. However, this principle is now under threat. Rehn emphasized that when central banks are trusted, the public, businesses, and financial markets believe in their commitment to maintaining price stability. This trust anchors inflation expectations. He noted that the credibility gained from independence enhances the effectiveness of monetary policy, allowing central banks to avoid drastic reactions to temporary economic disturbances.