Trump’s attempt to fire Fed governor Lisa Cook sparks legal and economic concerns
President Donald Trump’s unprecedented move to fire a sitting Federal Reserve governor is raising alarm among economists, investors, and political analysts.
(CNN)- President Donald Trump’s unprecedented move to fire a sitting Federal Reserve governor is raising alarm among economists, investors, and political analysts — with many warning that it could have far-reaching effects on everyday Americans.
The President announced his intent to remove Lisa Cook from the Fed Board, marking the first attempt to oust a governor in the central bank’s 111-year history. By law, Fed board members can only be dismissed for “cause,” and Cook currently faces no legal charges. In a letter, Trump claimed she “may have made false statements on one or more mortgage agreements.”
Experts say the decision is likely headed for the courts. “When executives start to try and meddle with central bank independence, that comes at real costs,” said Natasha Sarin, President and Co-founder of the Budget Lab at Yale.
Republican strategist Brad Todd argued that Cook and Fed Chair Jay Powell are “holding the economy hostage by not cutting rates.” If Cook’s seat were vacated, Trump would have the power to nominate her replacement, further pressuring the board to slash interest rates. Economists warn that such political interference could undermine the Fed’s ability to manage inflation.
“She and Jay Powell are resisting pressure because they believe steeper cuts aren’t good for the economy,” noted one analyst. “If you have a job, money saved, or children, this should be of concern,” added Sheelah Kolhatkar of The New Yorker.
Markets are already reacting. Overnight, stock futures dipped and the U.S. dollar index fell — signals that touch everything from retirement accounts to consumer spending power.
Beyond the financial implications, some see the move as part of Trump’s broader effort to punish perceived political enemies. “There’s going to be many other people that he’s going after as well, but I love it,” said former Bush White House official Ashley Davis.
