Trump fails to try to dismiss Lisa Cook with the independence of the Federal Reserve

This ruling, which will be almost appealed, is a blow to the Trump administration’s efforts to confirm more control of the traditionally independent federal reserve, which determines short -term interest rates to achieve its expensive goals of Congress at stable prices and the maximum employment. Congress also sought to isolate the Federal Reserve from daily policy.

Trump said it was Cooking shooting on August 25 On the allegations raised by one of the appointed, she committed fraud in mortgage related to two ownerships in 2021, before joining the Federal Reserve. Cook is accused of saying that two properties are “primary housing”, which could have led to low payments and mortgage rates, if he was appointed to a second house or investment.

Cook lawyers argued that shooting was illegal because the presidents could not only shoot on the province “for the reason”, which usually means incompetence or neglecting duty or pure while they were in office. They also said that she had a hearing and an opportunity to respond to the charges before being expelled, but it was also not presented. A lawsuit denied these charges but did not provide more details.

The issue can become a turning point for 112 -year -old federal preservation. Economists prefer Independent central banks Because they can do unimaginable things like raising interest rates to combat inflation more easily than elected officials.

Many economists are concerned that if the Federal Reserve falls under the control of the White House, this will maintain the main interest rate less than what is justified by the economic basics to meet Trump’s demands for the cheapest borrowing. This may accelerate inflation and can also raise interest rates in the long run, such as those on real estate loans and car loans. Investors may ask for a higher return to possess bonds to make up for more inflation in the future, and to raise borrowing costs for the American government, and the entire economy.

If Trump is able to replace Cook, he may be able to get 4-3 majority on the Federal Reserve Board. Trump appointed two members of the Board of Directors during his first term It has been nominated White House Economic Adviser Stephen Miran to replace him Adriana KogererThe Federal Reserve Governor is last unexpectedly resigned on August 1. Trump said he would only appoint people at the Federal Reserve who will support lower prices.

No president has been seeking to expel the governor of the Federal Reserve before.

The Supreme Court indicated that the president cannot shoot officials in politics, but he can do so “for the reason”, and it usually means misconduct or neglecting duty. Cook was not accused of any crime.

Trump has Overpowered Federal Reserve Chairman Jerome Powell and other members of the Federal Reserve Interest rate committee for not reducing the interest rate in the short term in which they control more quickly. It is currently 4.3 %, after the FBI policymakers reduced it at a full percentage of last year. Trump said he believed that he should reach 1.3 %, a level that is not supported by any cash points and few economists.

P. Recently indicate The central bank was inclined to reduce its rate at its next meeting from 16 to 17 September. However, the Federal Reserve is likely to reduce its primary rate slower than Trump, and may reach 3.25 % or so – higher than Trump.

Cook is The first black woman To serve as a ruler. She was a Marshall researcher and obtained certificates from Oxford University and the Faculty of Silman, and before joining the board of directors she studied at Michigan State University and Kennedy’s government college at Harvard University.

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