The President of the United States tries to obtain greater control over the central bank by the dismissal director
A Federal Court of Washington ruled on Tuesday 9, that the director of Federal Reserve (Fed) Lisa Cook can remain in office while fighting the efforts of the president of United States, Donald Trumpto fire him.
Judge Jia M. Cobb has established that the president of the Fed Jerome Powell and the Board of Directors of the institution “are preliminaries to carry out the author’s removal as a member of the Board of Directors based on the President’s Charter (Trump) of 25 August 2025, including being removed and denying their access to any of such benefits or resources of your position, up to the resolution of this dispute”.
On August 25, Trump published a letter of resignation from Cook on the social network of the accusations – without evidence – that the leader committed a mortgage fraud in the acquisition of two properties in 2021, before joining the Fed.
Cook’s lawyers claimed that their dismissal was illegal, since the presidents can only fire the directors of the Fed “for just cause”, which usually means inefficiency, negligence in fulfilling duty or prevalence in the exercise of the position. They also said that he was entitled to an audience and the opportunity to respond to the accusations before being fired, but nobody had any. In his cause, he denied the accusations, but did not provide further details.
The decision is a serious blow for the efforts of the Trump government to have greater control on the traditionally independent FED, which defines short -term interest rates to achieve its objectives established by the Congress of Stable prices and maximum use. The congress also tried to isolate the Fed of daily policy.
Cook is accused of saying that the two properties were “main residences”, that they could have involved initial payments and mortgage taxes lower than one of them had been designated as a second residence or investment properties.
The case can become a flex point for the Fed, which has existed for 112 years. Economists prefer independent central banks because they can adopt unpopular measures, such as the increase in interest rates to combat inflation, more easily of elected politicians.
Many economists fear that if the Fed has control of the White House, it maintains its basic interest rates lower than those justified by the economic bases to satisfy Trump’s requests in cheaper loans. This could accelerate inflation and also increase long -term interest rates such as mortgages and car purchase loans. Investors may require a higher income to have securities in order to compensate for greater inflation in the future, increasing the costs of loans to the United States government and the entire economy.
If Trump is able to replace Cook, he can obtain a majority of 4 to 3 from the administrative council of the Fed. Trump has appointed two members of the Council during his first term and has appointed an important economic councilor of the White House Stephen Miran to replace Adriana Kugler, another director of the Fed who unexpectedly resigned on August 1st. Trump has said that he will appoint only the people of the Fed who support lower rates.
No president has ever tried to fire a director of the Fed before.
The Supreme Court has reported that the president cannot fire the Fed employees for political differences, but can do it “for the just cause”, which usually means bad conduct or negligence in fulfilling duty. Cook was not accused of any crime.
Trump repeatedly attacked the president of the Fed Jerome Powell and the other members of the Fed interest rate committee for an interest rate that is no shorter. It is currently 4.3%, after the Fed policies formulators reduced it to a percentage point at the end of last year. Trump said he thinks they dedicate 1.3%, a level that no Fed employee and few economists support.
Powell recently reported that the Central Bank was inclined to reduce his rate to the next meeting of 16 and 17 September. However, the Fed will be likely to reduce its basic rate more slowly than Trump wants, perhaps for something about 3.25% – a higher level than Trump would prefer.
Cook is the first color woman to maintain the position of governor. It was a Marshall scholarship and graduated from Oxford University and Spelman College. Before joining the Council, he taught Michigan State University and Harvard University Kennedy School of Government. / With information from AP
This content was translated with the help of artificial intelligence tools and revised by our editorial team. Find out more in our artificial intelligence policy.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
