On August 25, Trump announced on Truth Social that that he will be terminating Federal Reserve Governor Lisa Cook from her position with immediate effect.
Without evidence, he claimed that she committed mortgage fraud. He has made the same accusation against political enemies including Senator Adam Schiff and New York Attorney General Letitia James.
Bill Pulte made the same accusation against Cook sometime last week, also without evidence. He was appointed by Trump to regulate Fannie Mae and Freddie Mac, which Trump wants to make public.
The consequences of this potentially illegal firing are being felt immediately.
Stock futures declined slightly late Monday, as did the dollar against other major currencies.
AP
In the longer term, the political independence of the Federal Reserve may decline.
Trump’s attempt to fire Cook likely relies on the “for cause” rule, which allows the President to fire the Fed Governor for misconduct or a dereliction for duty. However, since Trump is accusing Cook of a private misdeed, he still has no grounds to fire her, even if the allegation was true.
Cook has refused to back down, citing a lack of authority to terminate her from the position:
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”
AP
