Helsinki (Reuters) -Escalade of the attacks by American president Donald Trump against the American Federal Reserve (Fed) could have significant repercussions on the world economy and the financial markets, said Thursday in a speech Olli Rehn, member of the Council of Governors of the European Central Bank (BCE).

The uncertainties surrounding the independence of the largest central bank in the world are constantly increasing while Donald Trump announced on Monday dismiss one of the governors of the institution, Lisa Cook, after multiple criticisms against its president Jerome Powell in recent months.

The independence of the Fed is however an inviolable principle since the 1980s, recalled the governor of the Central Bank of Finland on Thursday

“Today, however, this principle is seriously waving. This could have significant and global repercussions on the financial markets and the real economy,” he said, “said Europeans should take action to strengthen confidence in the euro in order to avoid a similar deterioration in the autonomy of central banks on the old continent.

“It is not a simple coincidence if inflation in the euro zone has reached the target of 2%, it is in fact linked to the independence of the decisions of the Central Bank,” he continued.

While the growth of the euro zone has proven to be more resistant than expected, Olli Rehn said that inflation should slow down below the target of 2% in the short term with a drop in the cost of energy in particular.

“Within the Council of Governors of the ECB, we closely follow the economic situation and we keep acting if necessary,” he concluded.

(written by Anne Kauranen in Helsinki, Bertrand de Meyer, edited by Kate Entringer)

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