Bank of England Governor Andrew Bailey expressed his 'serious concern' on Wednesday regarding the threats to the independence of the Federal Reserve, describing it as a 'very serious issue.'
Bailey was appearing before the Treasury Committee in Parliament when asked about his opinion on the pressure that U.S. President Donald Trump is putting on the Federal Reserve to lower interest rates.
Trump publicly discussed the dismissal of Federal Reserve Chairman Jerome Powell, and in a sharp escalation last month, he also attempted to dismiss Federal Reserve Governor Lisa Cook; which raised a critical legal test of the Federal Reserve's ability to operate without political interference.
Bailey told the committee: 'This is a very dangerous situation, I am very concerned. The Federal Reserve has built a very strong reputation regarding independence and decision-making.' He explained that he takes any threats to the independence of central banks 'very seriously,' and that exploiting this independence in the face of other government decisions would be 'a risky path.'
He added: 'I believe that monetary and financial stability... are the foundation of policies.'
He continued addressing lawmakers in the committee: 'If we do that, we will enable you to make decisions in areas that governments and parliament should appropriately be making.'