President Donald Trump has demanded the removal of one of the governors of the US central bank, a move that escalates his long-running feud with the institution.
Late on Monday, he posted on his Truth Social account a letter addressed to Lisa Cook, stating that she was being removed from the Federal Reserve Board of Governors due to allegations of mortgage fraud.
This action has drawn sharp criticism from Democrats, who argue it constitutes unprecedented political interference.
Lisa Cook was appointed as governor of the Federal Reserve in 2022 by President Joe Biden, becoming the first African American to hold the position. Her term was slated to end in 2038. She has previously served on Barack Obama's Council of Economic Advisers and worked at the US Treasury.
Cook's responsibilities include participating in the committee that sets US monetary policy, particularly making decisions on interest rates to manage price stability and unemployment levels. Recently, she supported keeping interest rates unchanged.
Following Trump's accusations, which claim she may have submitted fraudulent mortgage documentation, Cook has announced her intention to fight her dismissal, contending that the president lacks just cause to fire her. This development raises questions about the scope of Trump's authority regarding Federal Reserve officials, which generally requires just cause for removal.
In a wider context, Trump's pressure on the Fed connects to his desire for lower interest rates, aimed at easing borrowing costs for American businesses and consumers amid increased inflation. The balancing act for the Federal Reserve is ensuring monetary policy aligns with economic stability while remaining independent from political pressures.
The fallout from this situation may lead to significant legal challenges, affecting the relationship between the central bank and the presidency.
