WASHINGTON (AP) – President Donald Trump said he was firing Monday night Federal Reserve Governor Lisa CookAn unprecedented move that constitutes a sharp escalation in his fight to gain stronger control over what has long been considered an institution. Independent from daily politics.
In a letter posted to his true social platform, Trump said he was quickly removing Cook due to allegations that she committed a mortgage fraud. Bill Palt, Trump’s appointee for the agency that regulates mortgage giants Fanny Mae and Freddie Mac, filed accusations last week.
Pulte allegedly claimed that Cook in 2021 was to improve his mortgage term, claiming two major residences in Ann Arbor, Michigan and Atlanta. Mortgage fees are often higher for the second home or the home you buy for rental.
Trump’s move is likely to almost touch the Supreme Court and be exposed to a massive legal battle that could potentially disrupt financial markets and increase interest rates.
The Fed’s independence is considered important to its ability to combat inflation. This is because unpopular measures can be taken, such as raising interest rates. If bond investors begin to lose faith that the Fed can control inflation, they will push the borrowing costs of bonds, car loans and business loans, demanding higher fees for bonds.
Legal scholars said the allegations are likely an excuse for the president to open another seat on the seven-member board, noting that he could appoint loyalty to advance his long-standing goal of low interest rates.
The federal governor votes on central bank interest rate decisions and financial regulations issues. They were appointed by the President and confirmed by the Senate, but they are not like Cabinet Secretaries serving at the president’s joy. They serve a 14-year term that is amazed at sequestering the Fed from political influence.
No president had tried to fire the federal governor before. Richard Nixon and Lyndon Johnson have put a lot of pressure on the Fed, mainly behind closed doors, with Richard Nixon and Lyndon Johnson putting a lot of pressure on the Fed, but in recent decades, both presidents have largely respected the Fed’s independence.
Still, behind the scenes pressure to keep interest rates low, the same goal Trump is sought, has been widely criticized for mentioning the ramping inflation that has been ramping in the late 1960s and ’70s.
The announcement comes days after Cook said she would not leave despite Trump’s previous demands to step down. Senate Democrats had expressed support for chefs who were not accused of fraud.
“The Federal Reserve is heavily responsible for setting interest rates and regulating member banks of reserves. Americans need to be totally confident in the integrity of the members entrusted with policy setting and oversight of the Federal Reserve.” “In light of your deceitful and potentially criminal conduct in fiscal matters, they don’t have that confidence in your integrity and I have not.”
Trump argued that the chef’s launch was constitutional, even if he did so, even if he would question the Fed’s control as an independent organisation.
“American enforcement is given to me as president, and as president, I have a strict obligation to ensure that US laws are faithfully enacted,” the president wrote in a cooking letter. “I have decided that in order to faithfully enact the law, I need to resign from your immediate duties.”
Among the unresolved legal issues is whether the cook may be allowed to stay in her seat while the case is unfolding. She may have to fight legal battles, not as a Fed but as a injured party.
In the meantime, Trump’s announcement has drawn responsibility from supporters and former Fed officials who are worried that Trump has put in too much power and is trying to control the country’s central bank.
“The president’s efforts to fire the sitting-down Federal Reserve Governor is part of a coordinated effort to turn financial regulators into obedient rapdogs who do what they say by independent watchdogs.
Managing one of Washington’s few independent bodies remains is the latest initiative by the administration. I have Trump I attacked repeatedly Federal Reserve Chairman Jerome Powell has even threatened to fire him without cutting short-term interest rates.
Enforcing Cook from the Fed’s management board would provide an opportunity to appoint Trump’s loyalty. Trump said he would only appoint officials who support the cuts.
Powell signaled last week. The Fed may cut fees soon Despite the risk of inflation remaining moderate. Meanwhile, Trump could replace Powell in May 2026 when Powell’s term expires. However, 12 members of the Fed’s interest rate setting committee have voted on whether to raise interest rates or lower rates, so even replacing chairs may not guarantee that Fed policies will change the way Trump wants.
