LONDON

The Bank of England governor on Wednesday warned that threats to the independence of the US Federal Reserve pose "a very dangerous road to go down."

"This is a very serious situation; I am very concerned," Andrew Bailey told MPs on the Treasury Select Committee on Wednesday.

Since returning to the White House in January, Trump has repeatedly criticized Fed Chair Jerome Powell for not cutting interest rates, calling him "too late" and "lousy" at his job.

The US central bank has kept its benchmark rate between 4.25% and 4.5% since December, while both the European Central Bank (ECB) and the Bank of England have lowered borrowing costs several times over the past year.

Trump has also attempted to fire one of the Fed’s governors, Lisa Cook, who is now suing the president.

Bailey told MPs: "The Federal Reserve is the central bank for the world's largest economy. It is a leading central bank. It has built up a very strong reputation for independence and its decision-making, so this is very concerning."

He added that it is the job of central banks to ensure economies remain stable so governments could take policy decisions "knowing the foundations are sound."

"What is happening now in the US," he warned, is that politicians should be able to trade off the foundations for those other decisions.

"I just think that is a very dangerous road to go down," he said.

Bailey's warnings echo those of ECB President Christine Lagarde, who recently warned that a loss of independence poses a "very serious danger" to the global economy.

Lagarde expressed concern that if the Fed is forced to respond to presidential orders, it will have a "very worrying" impact on global financial stability.