Donald Trump orders removal of Federal Reserve governor Lisa Cook | BBC News

Summary

President Trump has dismissed Federal Reserve Governor Lisa Cook, claiming she made false statements regarding mortgage agreements. Cook has strongly contested the firing, asserting that the president lacks the legal authority to remove her and that she intends to continue in her role. This move is unprecedented, as Federal Reserve governors serve 14-year terms designed to insulate them from political pressure. The decision comes amid Trump's ongoing pressure on the Fed to lower interest rates, which the Federal Reserve, led by Jerome Powell, has largely resisted. Legal battles may follow as the situation develops, raising questions about presidential authority and central bank independence.

Takeaways

• 🇺🇸 President Trump has dismissed Federal Reserve governor Lisa Cook, escalating his attempts to influence the US central bank.
• 📄 Trump claims Lisa Cook made false statements regarding mortgage agreements as the reason for her dismissal.
• ⚖️ Lisa Cook disputes the firing, stating that the president has no legal authority to remove her and intends to continue in her role.
• 📉 Trump has consistently pushed the Federal Reserve to lower interest rates, a move that has largely been resisted by the Fed.
• 🏦 The Federal Reserve, led by Jerome Powell, is responsible for setting monetary policy and ensuring financial stability.
• 🗣️ Trump has publicly criticized Powell, once calling him a 'numb skull.'
• ⏳ Federal Reserve governors serve 14-year terms designed to insulate them from political pressure.
• 🔁 These terms are staggered and renewed every two years to maintain independence from politics.
• 💼 Lisa Cook’s legal team plans to take necessary action to reverse what they consider an illegal attempt to remove her.
• ❓ The situation is unprecedented, raising questions about whether Cook can continue in her position and what the president’s next move might be.

Q & A

Who did President Trump attempt to sack from the Federal Reserve?

President Trump attempted to sack Lisa Cook, a governor of the Federal Reserve.

What reason did President Trump give for trying to dismiss Lisa Cook?

He claimed there was sufficient reason to believe Lisa Cook had made false statements on mortgage agreements.

How did Lisa Cook respond to President Trump's attempt to fire her?

Lisa Cook stated that the president has no authority to fire her and that no cause exists under the law, asserting that she will continue doing her job.

What is the usual purpose of the 14-year term for Federal Reserve governors?

The 14-year terms are designed to be long and staggered to avoid political interference and ensure that governors operate independently of short-term political pressures.

Why has President Trump criticized the Federal Reserve and Jerome Powell?

President Trump has urged the Fed to slash interest rates and has launched regular attacks on Jerome Powell, even calling him a 'numb skull,' largely because the Fed has resisted his demands for lower rates.

What is the Federal Reserve tasked with?

The Federal Reserve is tasked with deciding monetary policy and maintaining financial stability in the United States.

Why is the action taken by President Trump considered unprecedented?

No president has previously attempted to fire a member of the Federal Reserve, especially one serving a 14-year term intended to be politically insulated.

How did Lisa Cook’s legal team respond to the firing attempt?

Her lawyers released a statement saying they will take whatever action necessary to reverse what they consider an illegal attempt by the president to remove her from office.

What uncertainty remains after the firing attempt?

It is unclear whether Lisa Cook has been legally dismissed, whether she can continue in her role, and what steps President Trump might take next.

How does the structure of Federal Reserve terms prevent political influence?

The staggered and lengthy 14-year terms are designed to ensure continuity and independence, making it difficult for any sitting president to exert direct control over individual governors.

What role did social media play in this event?

President Trump used social media to announce his decision to fire Lisa Cook, which brought immediate public attention to the unprecedented action.