Firing Powell a Threat to Dollar and U.S. Economy, France Warns
France’s finance minister has warned that any move by Trump to remove the Federal Reserve Chair could have far-reaching consequences for the U.S. economy and the global role of the dollar.
In response to recent tensions between the U.S. administration and the Federal Reserve, French Finance Minister Éric Lombard has cautioned against the potential dismissal of Jerome Powell, Chair of the Federal Reserve. In an interview with La Tribune Dimanche, Lombard emphasized that such a move could severely damage the dollar’s credibility and lead to deep economic disruption in the United States.
“Donald Trump has already undermined the credibility of the dollar with his aggressive tariff policies,” Lombard said. “If Powell is removed, the damage will intensify, triggering instability in the bond market.”
Economic Fallout of Removing Powell
According to Lombard, removing the Fed Chair would likely raise debt servicing costs for the U.S. and cause “a profound disorganization of the country’s economy.” He added that such consequences could eventually push Washington into negotiations aimed at easing tensions with global trade partners.
These comments come after former President Donald Trump expressed frustration with Powell’s reluctance to lower interest rates. In a recent social media post, Trump wrote that Powell’s “termination couldn’t come quickly enough.” It remains unclear whether he meant the end of Powell’s term in 2026 or a premature dismissal. National Economic Council Director Kevin Hassett later confirmed that Trump was exploring legal avenues to remove Powell from office.
Longstanding Disputes Between Paris and Washington
Lombard’s remarks highlight broader tensions between France and the United States during Trump’s presidency. French President Emmanuel Macron has openly disagreed with Trump on several issues, including the war in Ukraine, trade policy, and climate science funding. Macron even extended an offer of refuge to American scientists affected by federal research cuts.
Nevertheless, Lombard’s statements stand out for their unusually direct engagement with U.S. domestic affairs — a rare move in international diplomacy.
Tariff Policy and Global Trade Concerns
Lombard also criticized the 10% tariffs imposed by the U.S. on European imports, stating that they do not represent “common ground” for a trade deal. “The European goal is to establish a free trade zone with the United States,” he said. “But a 10% tariff is a major hike — unsustainable for the U.S. economy and a serious risk to global trade.”
A Call for Economic Solidarity Within Europe
The French finance minister called on European CEOs to demonstrate “patriotism” by aligning more closely with their governments to protect the region’s economic interests. His comments appeared to reference recent remarks from French billionaire Bernard Arnault — owner of LVMH, which includes Moët & Chandon, Veuve Clicquot, and Hennessy — who criticized EU leaders for not pushing hard enough in tariff negotiations.
Overall, these developments have once again highlighted the importance of central bank independence and the far-reaching impact of U.S. domestic policy decisions on global financial markets — especially relevant for forex traders and economic analysts around the world.
