Trump vs Fed: Clash Over Lisa Cook’s Removal
President Donald Trump has escalated his feud with the Federal Reserve by ordering the removal of Fed Governor Lisa Cook, sparking a heated political and legal storm in Washington.
On Monday, Trump posted a letter on his Truth Social account announcing Cook’s dismissal, citing mortgage fraud allegations. Cook, however, has rejected the claims and filed a lawsuit to block the move, calling the dismissal “unlawful and void.”
Cook, appointed in 2022 by President Joe Biden, made history as the first African American woman on the Federal Reserve Board of Governors. Her term was due to last until 2038. She has played a significant role in US monetary policy, including recent decisions to keep interest rates steady.
The president accused Cook of signing mortgage documents for two different homes as her primary residence. While the documents exist, Cook has not been charged with any crime. Legal experts stress that the Federal Reserve Act only allows a president to remove a governor “for cause,” setting a high bar that could trigger a prolonged court battle.Trump vs Fed
Democrats condemned Trump’s move as an attack on the independence of the Fed, Trump vs Fed, warning it could undermine trust in the central bank. The Fed itself issued a rare statement defending the importance of long tenures and protection from political interference.
Financial markets showed limited reaction, though US Treasury bonds saw some sell-offs amid investor concerns about central bank autonomy.
Trump has repeatedly pressured the Fed to cut interest rates, arguing lower borrowing costs would stimulate growth and reduce trade deficits. Fed Chair Jerome Powell has so far resisted, though he hinted at a possible rate cut in September.Trump vs Fed
Cook’s legal fight could shape not only the future of her position but also the broader debate over the Fed’s independence in the face of political pressure.Trump vs Fed
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