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ECB Board Member Rehn Warns: Fed's Independence Being Weakened, Market Trust May Be Affected
Summary: According to Jinshi News, European Central Bank board member and Bank of Finland Governor Rehn warned in a speech on Thursday that the independence of the Federal Reserve is facing its first challenge in decades, posing significant risks to the market and economy. Rehn stated that since the containment of double-digit inflation in the 1980s, ...
According to Jinshi News, European Central Bank board member and Bank of Finland Governor Rehn warned in a speech on Thursday that the independence of the Federal Reserve is facing its first challenge in decades, posing significant risks to the market and economy. Rehn stated that since the containment of double-digit inflation in the 1980s, the Fed's independence has been considered an inviolable principle - but now this principle is being undermined. When the central bank is trusted, the public, businesses, and financial markets believe it will maintain price stability. This trust anchors inflation expectations. Rehn stated that independence increases the credibility of monetary policy, meaning the central bank does not need to react strongly to temporary economic turbulence.
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Link: ECB Board Member Rehn Warns: Fed's Independence Being Weakened, Market Trust May Be Affected [Copy]
