Steps by US President Donald Trump to remove Federal Reserve Chairman Jerome Powell or Fed governor Lisa Cook would represent a "very serious danger for the US economy and the world economy", European Central Bank President Christine Lagarde has said.
Mr Trump has repeatedly attacked Mr Powell, for not cutting the short-term interest rate and threatened to fire him.
He is also attempting to fire Federal Reserve Governor Lisa Cook.
"If US monetary policy were no longer independent and instead dependent on the dictates of this or that person, then I believe that the effect on the balance of the American economy could, as a result of the effects this would have around the world, be very worrying, because it is the largest economy in the world," Ms Lagarde told Radio Classique.
A court hearting on Mr Trump's attempt to fire Ms Cook ended on Friday with no immediate ruling on the legal fight, meaning she will remain in place for now.
After hearing oral arguments for two hours in a court in Washington, DC, US District Judge Jia Cobb asked Ms Cook's lawyers to file a brief tomorrow laying out in more detail their arguments for why the ouster was unlawful.
The case, which will likely end up before the US Supreme Court, has ramifications for the Fed's ability to set interest rate policy without regard to politicians' wishes, widely seen as critical to any central bank's ability to keep inflation under control. The Fed has said it would abide by any court decision.
Ms Cook sued Trump and the Fed last Thursday, saying the Republican president's claim she engaged in mortgage fraud before she joined the central bank did not give him legal authority to remove her, and was a pretext to fire her for her monetary policy stance.
Ms Lagarde also said that a ruling on Friday by a US appeals court that most of Mr Trump's tariffs were illegal were adding a "further layer of uncertainty" to the global economic outlook.
The ruling threatens what has become a pillar of Mr Trump's foreign policy since starting his second term in the White House in January. He has used the levies imposed on imported goods to exert political pressure and renegotiate trade deals even as the tariffs have increased volatility in financial markets.
The president blasted the decision and vowed to take the case to the US Supreme Court. The appeals court said his tariffs can remain in effect until 14 October to allow for appeals.
