The News
President Donald Trump’s attempt on Monday to dismiss Federal Reserve Governor Lisa Cook set the stage for a landmark battle over the central bank’s independence. Trump framed the dismissal as a response to an unproven allegation of mortgage fraud by one of his housing officials, writing that the allegation “calls into question your competence and trustworthiness as a financial regulator.” Cook earlier said she will “answer any legitimate questions” over her mortgages but has “no intention of being bullied to step down.”
Cook’s departure before her term ends in 2038 would create another vacancy for the president to fill as he seeks to pressure policymakers into lowering interest rates. Her dismissal is likely to be challenged in court. Trump’s other top target at the Fed, Chair Jerome Powell — who can’t as easily be attacked directly without risking major market moves — last week signaled the central bank was on track for a policy change regardless.
Notable
- The move is a “stunning escalation of [Trump’s] attacks on the US central bank,” the FT wrote.
- “Many outside observers consider Ms. Cook a relative ‘dove’ … who generally supports lower interest rates,” per The New York Times.