Donald Trump has said he is firing Federal Reserve governor Lisa Cook ‘effective immediately’ even as she argues Donald Trump had ‘no authority’ to fire her. This is the latest development in the US president’s attacks on the central bank.
In a letter to Cook posted on social media on Monday night, Trump said there was “sufficient reason” to believe she had made false statements on mortgage agreements, giving him cause to fire her.
The president cited his powers under the constitution and US law to sack the official.
“The Federal Reserve Act provides that you may be removed, at my discretion, for cause,” Trump wrote.
Cook has however doubled down stating that she would not resign.
“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.
“I will continue to carry out my duties to help the American economy as I have been doing since 2022.” She added.
Trump’s Federal Reserves Attack
Trump has also threatened to sack federal reserves chair Jerome Powell calling him a “stubborn mule” for holding rates steady this year.
The stand-off between the White House and the Fed comes as US central bankers are weighing an interest rate cut as early as next month.
Cook’s removal would pave the way for Trump to select a replacement governor more amenable to rate cuts. It would be his second opportunity in weeks, after Adriana Kugler announced plans to leave the central bank months before her term was set to end in January.
Trump nominated Stephen Miran, a close ally and architect of his administration’s unorthodox economic policies, to take Kugler’s seat.
Should Trump obtain a majority of allies on the seven-member board, he would also be in a position to fire the heads of the 12 regional Federal Reserves.
