Summers says Trump is putting the Fed on the verge of a ‘credibility crisis’

Former Treasury Secretary Lawrence Summers warned that while financial markets have so far shown limited concern with regard to the Federal Reserve’s independence, the situation “could turn very quickly.”

“We’re on the foothills of a credibility crisis” with regard to the Fed, Mr. Summers said on Bloomberg Television’s Wall Street Week with David Westin. “We are in completely unprecedented territory.”

Mr. Summers cited President Donald Trump’s demands that the Fed cut interest rates by some three percentage points — “which no economist anywhere has endorsed” — along with his “harsh rhetoric” criticizing central bank Chair Jerome Powell. He also highlighted Trump’s efforts to remove Governor Lisa Cook “with no kind of due process” and reported on a scenario where Trump appointees attempt