President Trump Federal Reserve Governor Lisa Steps to Fire Cook According to Wall Street analysts, weeping financial markets, can increase uncertainty for investors and increase concerns that the White House is historically trying to control the control of an independent central bank.
Mr. Trump announced the removal of him in a letter posted on the truth social on Monday night, citing the allegations that he had it. Mortgaged,
Cook denied that Mr. Trump had a legal right to set fire and promised not to resign on Tuesday. “I will continue to fulfill my duties to help the American economy as I have been doing from 2022,” he said in a statement. Cook’s lawyer also vowed to fight the firing in the court.
Asked by CBS News Chief White House correspondent Nancy Cordes on Tuesday, whether the Trump administration is effectively making the government by digging in the mortgage records of public authorities, Mr. Trump replied, “No. They are public.”
Cook has not been accused of crime. The Bill Bridge, the leading Bill bridge of the Federal Housing Finance Agency, who level the initial allegations against Cook, called the Department of Justice to investigate Cook.
Cook was appointed for a 14 -year term at the Board of Governors of Fed in 2022 and also works on the Federal Open Market Committee (FOMC), which determines short -term interest rates in the US
A Federal Reserve spokesman said in a statement on Tuesday that the Central Bank “will continue to carry forward its duties established by the law.” Fed also told Cook’s statement that she was planning to firing in the court and said it would “follow any court’s decision.”
“The Congress, through the Federal Reserve Act, directs that the governors work in long, fixed terms and can only be removed ‘for the reason’ by the President.” Fed said that prolonged tenure for governors serve as a significant security, ensuring that monetary policy decisions are based on data, economic analysis and long -term interests of American people. ,
More impact on the fed?
financial markets Was in control On Tuesday, Mr. Trump’s attempt to exclude Cook. Nevertheless, this decision was a matter of Wall Street, many analysts said that Cook’s dismissal could open the door for Sri Trump to get control of Fed’s seven -member board.
Jet Seberg, an analyst at TD Securities, said, “The decision of President Trump to fire Lisa Cook as Fed Governor gives him the ability to achieve majority in the Federal Reserve Board and affect FOMC’s widespread composition.”
The White House did not respond to an request for comment whether firing cook could affect financial markets and compromise Fed’s freedom.
Mr. Trump has also nominated Stephen Miran, who is the head of the Council of Economic Advisors of the White House to serve in the Fed Board. Mr. Trump has been named a nominee to make Fed Chair Zerome Powell a success, the term ends in May 2025; Powell is scheduled to continue the service in the Fed Board by January of 2028 and may continue to work in that role after leaving the post as a fed chair.
If Cook is left the Fed Board, Mr. Trump may eventually end up with five appointments on the panel by mid -2026, which gives more benefits to affect the monetary policy according to the Investment Advisory firm Capital Economics.
During a meeting on Tuesday, Mr. Trump asked a reporter that he was considering to replace Cook on the Fed Board. “We will soon have a majority so that it would be great,” he said.
Mr. Trump has repeatedly killed Powell for the Central Bank’s decision to cut interest rates, policy makers remained cautious to be cautious about reducing the cost of borrowing, until the inflation remains above the 2% target of the Fed. Powell indicated last week that A Rate cuts may occur on the horizon During a speech in Jackson Hole, Vyoming, Economic Seminar.
No guarantee of low interest rates
The 12-Memberly FOMC Fed is composed of seven members of the Board of Governors; Chairman of Federal Reserve Bank of New York; And four of the 11 Fed Bank Presidents, who work on a rotating basis for one year of terms.
The interlocking relationship suggests that stacking the Fed Board with loyalists will not guarantee the interest rate cut, which Mr. Trump has demanded, the Gregory Park, Strategy Counseling firm, the chief economist of I-Parthenon, told CBS Manivatch.
He said, “This is not only about the administration of persons and the Congress to confirm those persons – it is also how these individuals see their role and give importance to their freedom,” he said.
Analysts with Capital Economics said that the appointment of Mr. Trump would be required to persuade other FOMC members to persuade in ways to establish monetary policy that align with the economic purposes of the White House. He said in a report, “It could be difficult that other people feel forced to defend the fed from political attacks,” he said in a report.
For decades, investors have generally seen the Fed as a neutral arbiter, which is directed by its mandate to keep the inflation check and the job market humming. As a result, no perception that Mr. Trump is reducing the autonomy of Fed, according to Nigel Green, CEO of the Global Financial Advisory firm Devere Group, Nigel Green, the markets can be defeated.
Green said in an email, “Investors are responding because the independence of the Central Bank is important for the stability of the market, and any indication of political capture increases the alarm bell everywhere.”
Meanwhile, the question is whether Cook can be removed from the fed board, unresolved. Under the Federal Reserve Act of 1913, the President has the right to remove Fed appointments before the end of his term, but only for “cause”. Analysts said the legal dispute over the removal of Cook could increase in the Supreme Court,
“The situation is extremely liquid,” said the dako. “So until we get some clarity as an accurate conviction, you are not necessarily going to see very important movements in the markets.”
