European Central Bank board member Rehn warned: the independence of the Fed is being weakened, and market trust may be affected.

On August 28, Jin10 reported that the European Central Bank’s committee member and the Governor of the Bank of Finland, Rehn, warned in a speech on Thursday that the independence of the Fed is facing challenges not seen in decades, posing “significant” risks to the markets and the economy. Rehn stated: “Since the double-digit inflation of the 1980s was brought under control, the independence of the Fed has been regarded as an inviolable principle - but now this principle is being undermined. When a central bank is trusted, the public, businesses, and financial markets believe it will maintain price stability. This trust anchors inflation expectations.” Rehn pointed out that the credibility brought by independence enhances the effectiveness of monetary policy, meaning that the central bank does not need to respond “dramatically” to temporary economic turmoil.