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By David Ljunggren and Promit Mukherjee<\/p>\n
OTTAWA, Jan 28 (Reuters) – The threat to the independence of the U.S. Federal Reserve is boosting economic uncertainty \u200baround the world, Bank of Canada Governor Tiff Macklem said on \u200cWednesday in his strongest comments to date on the outlook for the Fed.<\/p>\n
U.S. President Donald Trump has \u200crepeatedly criticized Fed Chairman Jerome Powell, demanding he cut interest rates. He is seeking to remove Fed governor Lisa Cook while the Department of Justice has threatened Powell with a criminal indictment.<\/p>\n
Macklem made his remarks to reporters after keeping rates on \u2060hold amid what he called \u200cunusually high levels of uncertainty.<\/p>\n
“I think the threat to the independence of the central bank in the United States is one \u200dthing that has sort of been contributing to this sense of uncertainty,” he said.<\/p>\n
“The Federal Reserve is the biggest, most important central bank in the world, and we all need \u200bit to work well. A loss of independence of the Fed would affect \u200cus all,” he added, saying Canada would be particularly affected given its close economic links to the United States.<\/p>\n
Macklem was one of the central bank heads who earlier this month issued a joint statement backing Powell. Last September, Macklem said Trump’s attempts to pressure the Fed were starting to hit markets.<\/p>\n
Keeping central banks \u2060independent lets them take “difficult decisions” that benefit citizens, \u200bMacklem said.<\/p>\n
“He is doing a good job at \u200bleading the Fed based on evidence, based on facts … I hope it stays that way. That’s going to be important for everyone,” \u200dhe said.<\/p>\n
Bank of Canada \u2060senior deputy governor Carolyn Rogers said a strong Fed benefited virtually every economy in the world because it kept markets and inflation stable.<\/p>\n
“Those things \u2060contribute to predictability and less sort of volatility in rates … there are a lot of reasons \u200cfor having a strong, independent Fed,” she told the press conference.<\/p>\n
(Reporting \u200cby David Ljunggren. Editing by Jane Merriman)<\/p>\n<\/p><\/div>\n