Trump “shoots” Lisa Cook and escalates his war against the federal reserve

Donald Trump was not ashamed: he wanted to drop interest rates quickly. For months, the president has fed the Federal Reserve for the weakening and reducing rates to slowly. In July, he flirted with the shooting of Jerome Powell, the Fed’s chair, but supported. Another attack angle opened when Bill Pulte, head of the Federal Housing Finance Agency, claimed that Lisa Cook, a governor in the council of the central bank, lied to her mortgage applications. This time the president beat. In a letter on August 25 that was posted to Truth Social, his social media platform, he announced that he immediately dismissed Ms Cook ‘effectively’. She, in turn, issued a statement stating that Mr. Trump has no authority to fire her and refuses to resign. The legality of the president’s move is very uncertain. A ruling by the Supreme Court in May has confirmed that Fed -Governors can only be dismissed “because of matter”, and Ms. Cook is not, let alone charged with any crime. The allegations, which the Department of Justice is investigating, are related to paperwork presented before Ms. Cook submitted her post. There is little precedent: No Fed -Governor has been fired before. The move is a dramatic escalation in the struggle of Mr. Trump with the Fed – The Agency of the US government that is the best of political interference in order to make the monetary policy independent. In normal circumstances, Fed Governors have long terms of office and are difficult to expose. Ms Cook’s term will run up to 2038. But what has been a war war so far is now anything but sure in the courts. As Mr. Trump eventually gets a relatively free hand to drop fed governors, the independence of the central bank in America would indeed seem fragile. Markets have responded nervously. The dollar fell 0.3% in the hours after the announcement. The S&P 500 index of large US stocks fell by almost 0.5% in the trading of futures, and the returns of ten years of Treasury increased by 0.04 percentage points. It is an uncomfortable combination, which reflects the US assets that are generally cheap. But so far, the declines have not been enormous. Investors simply treat the news unwelcome, and may be waiting to see exactly how things are going. Read more: Earlier this month, Mr. Trump also used Truth Social to fire Erika Mcentarfer, the head of the Bureau of Labor Statistics (BLS), after reviewing the employment data showed that the growth of jobs had weakened sharply. He suggested he replaced her with EJ Antoni, brought a Trump in line. Although politically motivated data fidge and rate cuts are still a little way, it is easier to suggest today than at the beginning of the year. Mr. Trump will have to turn a few more seats at the Fed before he has a hope of persuading a majority of the tariff to vote for more than a handful of cuts. And the thousands of civil servants involved in the composition of America’s economic data would surely sound the alarm if Mr. Antoni is trying to manipulate the work or inflation figures. A total of, previously non-party parts of America’s policy machine were dragged into the political struggle, and it could possibly stay there. In addition, the actions of Mr. Trump is almost certainly self-destructive by reaching his ultimate goal-the borrowing cost for the federal government and ordinary Americans, much more difficult to achieve. The Fed controls only short -term interest rates; The bond market is determined in longer term. Between outdoor deficiencies and the threat that political interference could hold inflation high, investors are becoming timid. The yield on 30-year-old treasury is almost 5% and has increased over the past few months, even if the economy has delayed. As Mr. Trump found high interest rates if growth was strong, it would still be unpleasant to combine it with poor growth.