- Federal Reserve Board Governor Lisa Cook sued to challenge her removal by President Donald Trump.
- Trump said Monday that he was firing Cook because of allegations that she committed mortgage fraud.
- Critics say that the move undermines the independence of the Fed, which sets key interest rates that affect mortgage rates and other debt rates.
I’ll note that the Supreme Court previously required that all firings of federal reserve officials by the President be for cause. So he had one of his henchmen cook up allegations, but couldn’t get an indictment for them, and wants to fire her over them just because.
Isn’t that a subset of bullet 2?
Sorta, typically we think of raising/lowering interest rates to combat macroeconomic issues. Raising rates cools an overzealous economy, lowering rates fires up a slow economy.
However, we have a slowing economy with hot/rising prices. Either way you move rates you’ll likely end up exacerbating one of those issues. So the knee jerk reaction to lower rates could backfire.
IMO the difference is that it’s blatently self-serving and doesn’t even pretend to be concerned with the long-term health of the economy.