Fed at a policy, political crossroads poses global risks
WASHINGTON (Reuters) -Global central bankers who have come to view the U.S. Federal Reserve as a source of stability now face an unpredictable period where the Fed's monetary policy decisions are being pulled in conflicting directions and the institution's independence could be at risk. The Fed's upcoming policy choices pose one issue, with the potential that as other central banks cut rates in response to slowing growth the U.S. needs tight monetary policy to ward off tariff-driven inflation, a divergence that could stress dollar funding markets and make financing more expensive for less-developed countries in particular. Another, and perhaps more fundamental issue, is the question of whether the Fed can remain above the political fray in the face of attacks by U.S. President Donald Trump, who has repeatedly expressed his displeasure with the Fed's policy and its chief, Jerome Powell.