WASHINGTON (AP) – A federal court ruled Tuesday that he suffered from the federal reserve governor Lisa Cook You can stay in her position while she fights President Donald Trump’s efforts I’ll fire her.
The almost certainly appealed ruling hits the Trump administration’s efforts to advocate for stronger control over the traditionally independent Fed. Congress is also trying to isolate the Fed from daily politics.
Trump said he was Fires the chef on August 25th One of his appointees over allegations that she committed mortgage fraud in connection with two properties she purchased in 2021 before she joined the Fed. Cook has been accused of stating the two properties as “major residences,” which could result in lower payments and mortgage rates than if either of them were designated as second homes or investment properties.
Cook’s lawyers argued that it was illegal to fire her because the president can only fire the Fed governor “for a cause.” They also said she was entitled to the opportunity to respond to the charges before being heard and fired, but was not offered either. Her case denied the charges but did not provide details.
This case could be a turning point for the 112-year-old federal reservoir. Likes by economists Independent central bank Because they can do unpopular things like lifting interest rates to combat inflation than elected officials.
Many economists worry that if the Fed is under White House control, they will keep interest rates that are more important than justified by the economic foundations to meet Trump’s demands for cheaper borrowing. It could accelerate inflation and boost long-term interest rates on mortgages and car loans. Investors may demand higher yields on bonds to offset greater future inflation and lift borrowing costs for the US government and the economy as a whole.
If Trump can replace the cook, he could win a 4-3 majority on the Fed’s management board. Trump appointed two board members during his first term, Nominated Main White House economic adviser Stephen Milan replaces Adriana KuglerAnother Federal Reserve Governor unexpectedly resigned on August 1st.
No president had tried to fire the federal governor before.
The Supreme Court has shown that while the president cannot fire Fed officials for policy differences, he can do so “for the sake of causes,” usually implying fraud or disregard for obligations. Cook has not been charged with a crime.
I have Trump I attacked repeatedly Fed Chairman Jerome Powell and other members of the Fed’s interest setting committee to avoid cutting short-term interest rates they manage more quickly. Currently, Fed policymakers cut all points at the end of last year, at 4.3%. Trump said he believes it should be at a low level of 1.3%, which is not supported by Fed civil servants and a small number of economists.
Powell Recently signaled The central bank was leaning towards lowering its fees at its next meeting on September 16th-17th. Still, the Fed could go slower and perhaps as low as 3.25%, than Trump hopes.
The chef is First black woman He serves as governor. She is a Marshall academic, earning degrees from Oxford and Spellman University, and before joining the board, she taught at Kennedy Government Schools at Michigan State University and Harvard University.
