President Donald Trump has called for the removal of Lisa Cook from the Federal Reserve Board of Governors, citing allegations of mortgage fraud. This announcement was made on his Truth Social account, where he claimed that Cook falsely attested to two properties being her primary residence in documents signed two weeks apart. The request for her removal has drawn criticism from Democrats, who see it as an instance of political interference.
Lisa Cook, who was appointed by President Joe Biden in 2022, is the first African American to serve on the Federal Reserve Board and was set to remain in her position until 2038. Prior to her appointment, she was part of Barack Obama’s Council of Economic Advisers and held a position at the US Treasury. The Board of Governors plays a crucial role in determining monetary policy, setting interest rates, and managing inflation.
Trump’s accusations against Cook include her alleged falsification of records to secure a mortgage. Although CNN obtained documents showing she claimed two primary residences, it remains unclear whether she disclosed this to both lenders. Cook has not faced any formal charges and has stated her intention to contest her dismissal, claiming that Trump lacked just cause for firing her.
The Federal Reserve operates independently of the president, meaning its officials cannot be removed at will. Under the Federal Reserve Act, a president can dismiss a governor “for cause.” Trump referenced a “criminal referral” linked to Cook, suggesting a possible investigation into her actions, though no charges have been filed against her.
The potential legal implications surrounding Cook’s removal are noteworthy, with experts questioning whether Trump’s rationale meets the “for cause” standard. Meanwhile, market reactions to Trump’s actions have remained subdued as stakeholders await further developments. Additionally, Trump has advocated for lower interest rates to stimulate the economy, which contrasts with the Fed’s current policy stance.
Source: https://www.bbc.com/news/articles/cedvj2d5538o?at_medium=RSS&at_campaign=rss