As the political tug-of-war between US President Donald Trump and Federal Reserve Chair Jerome Powell intensifies, echoes of a similar battle in Argentina a decade ago have raised alarm bells among economists and observers. The ongoing feud, marked by Trump’s unrelenting criticism of the central bank’s policies and his attempts to influence its decision-making, has drawn comparisons to the 2010 clash between then-Argentine President Cristina Kirchner and the country’s central bank chief, Martin Redrado.
Redrado, who was fired for resisting Kirchner’s orders to hand over foreign reserves to help pay off national debt, fought the decision successfully in court but eventually resigned in the face of what he described as “intolerable” pressure. The incident was an early warning of the economic turmoil that would later engulf Argentina, leading to high inflation and a currency plunge from which the country is still recovering.
Now, as Trump continues to accuse the Fed of mishandling the economy and driving up debt costs, his interventions have sparked a debate about whether the US might be heading down a similar path. Economists, including former Federal Reserve Chair Janet Yellen, have warned that Trump’s actions are “the road to a banana republic,” a
