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Europeans fear Trump’s pressure on the Federal Reserve

Some European central bank and supervisory officials are questioning whether they can continue to rely on the US Federal Reserve to provide dollar funding during market stress. Reuters reports this with reference to its own sources. The sources told Reuters that they believe it is unlikely that the Fed will not fulfill its funding support obligations - and the US central bank itself has not given any signals to suggest otherwise. But European officials have held informal discussions about the possibility - as Reuters first reported - because their trust in the US government has been shaken by some of the Trump administration's actions. At some European forums where participants assess potential risks to the financial system, these officials have discussed scenarios in which the U.S. government could pressure the Fed to suspend its dollar support program, two sources said. According to the two sources, some officials discussed whether they could find alternatives to the US central bank. In times of market stress, the Fed has provided the European Central Bank and other major partners with access to dollar funding. The conclusion from these discussions is that there is no good replacement for the Fed, said six sources, including senior ECB and European Union banking supervisors with firsthand knowledge of these conversations. The post Europeans fear Trump’s pressure on the Federal Reserve appeared first on Freedom.