Trump’s attempt to fire one of the seven Federal Reserve governors will likely end up in court and could more clearly define the limits of the president’s legal powers over the traditionally independent institution.
President Donald Trump’s attempt to fire one of the seven governors of the Federal Reserve will likely end up in court and could more clearly define the limits of the president’s legal powers over the traditionally independent institution.
Legal experts say the Republican president’s claim that he can fire Lisa Cook, who was appointed by Democratic President Joe Biden, is on shaky ground. But it’s an unprecedented move that hasn’t played out in the courts before, and the Supreme Court this year has been much more willing to let the president remove agency officials than in the past.
If Trump succeeds in removing Cook from the board, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables the Fed to take unpopular steps like raising interest rates. A less-independent Fed could leave Americans paying higher rates for mortgages, car loans and business loans, because investors could demand higher rates to own bonds to offset greater inflation, pushing up borrowing costs throughout the economy.
