Trump's Bid to Oust Fed Governor Sparks Legal Battle
The Trump administration seeks to remove Federal Reserve Governor Lisa Cook, citing mortgage fraud as a reason. Cook, denying the allegations, argues the move threatens market stability ahead of a crucial Fed meeting. The case may reach the U.S. Supreme Court and raises questions about the Fed's independence.
In a contentious move, President Donald Trump's administration has urged a federal appeals court to permit the temporary removal of Federal Reserve Governor Lisa Cook. This development, unfolding ahead of a pivotal central bank meeting, threatens to induce market volatility, Cook's attorneys have warned.
Trump charges Cook with mortgage fraud, prompting the Justice Department to seek her immediate dismissal before a crucial September policy meeting. The case, pending court judgment, could escalate to the U.S. Supreme Court and potentially redefine the boundaries of presidential power over independent financial bodies.
The central issue remains whether political interference could undermine the Federal Reserve's mandate to decide interest rates impartially—a principle seen as essential for maintaining economic stability. Despite historically strict guidelines for removing Fed governors, this legal battle increasingly underscores tensions between executive authority and institutional independence.
(With inputs from agencies.)
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