First assault for Lisa Cook. He has signed up somewhat in his judicial fight with the US president to maintain his position: a federal judge has decided that he can continue to exercise his duties as long as a case that can have a direct effect on the future of the Central Bank as an independent entity can continue in court. But US President Donald Trump has received a small compensation in his reverse: his candidate for another position at the Board of Governors, Stephen Miran, has received the approval of a key committee of the Senate, and only depends on the approval of the plenary to be confirmed in office.
Judge Jia Cobb has found, in a preliminary way, that Trump’s accusations against the former professor about alleged mortgage fraud before his arrival at the Federal Reserve are not sufficient reasons to dismiss it. “President Trump has not revealed anything related to the conduct or management of Cook as a member of the Board of Governors who indicates that he is harming the Federal Reserve or the public interest because he fulfills his tasks ineffectively or fraudulently,” said the magistrate.
Trump accuses Cook, the first African -American governor of the FED, of having declared as usual housing two different properties in two different states, in two mortgage credit applications in 2021, a year before the then Professor of Economics at the Michigan State University was approved by the Senate to be one of the seven members of the Board of Governors of the Fed, chaired by Jerome Powell. Since the president announced the dismissal in his social networks, in the states of Michigan and Georgia, against the former academic.
Cook denies having committed fraud. He blames, on the other hand, Trump’s interest in Cesar her to the president’s desire to replace her by another person related to him and thus have a majority at the Board of Governors who folds his wishes in monetary policy. Cook’s departure would open to Trump the possibility of a majority of four of seven members at the Board of Governors, after the candidate who has proposed to replace Kugler, Stephen Miran, director of the Council of Economic Advisors of the White House is expected to confirm the confirmation of the Senate and can already take the position next week, for the meeting of September 16 and 17 in which it will be decided on the interest rates. The economist has received on Wednesday the first support: his candidacy has received the approval of the Banking Commission in the Senate, by thirteen votes – all Republicans – against Once, all Democrats. Now your confirmation will be addressed in the Senate Plenary. The White House, and its match, aspire to vote before the Fed meeting next week. The Democratic opposition argues that it is not so clear that its rivals can force an accelerated procedure.
Since he returned to the White House in January, the Republican has claimed in all possible tones – insults included – that the Fed cuts interest rates. On Wednesday he returned to the load. After the monthly data on the prices of the producer were made known, which against prognosis threw a monthly decrease of 0.1%, the president wrote on his social networks: “There is no inflation! ‘Too late’ (the nickname with which lately refers to Powell) must cut the guy, big, right now. Powell is a total disaster, he has no idea !!!
So far, and despite Trump’s calls, the Central Bank had kept the types unchanged by considering that the labor market remained solid, but continued the risk of recurring inflation, finally under control after the outbreak of the post-covid years. However, the weak employment data of recent months have joined very downward reviews of the figures of the last year, which now aim for almost one million less jobs of what was calculated so far. The weakness of the labor market can, therefore, to change your mind to the Fed at the meeting next week of its open market committee.
The White House has limited himself to commenting on the decision of Judge Cobb around Cook that Trump fired “legally” and for motive. “This decision will not be the last word on this matter,” the presidential office said. The Trump government considers that the president has the power to decide what finds as “justified cause” and that the courts have no powers to pronounce on such decisions.
In an opinion in May, the directors of independent public agencies, but pointed out that the Federal Reserve represents a possible exception.
Fed regulations, whose independence is essential for the good progress of the US economy, provides that the president can cease his managers, but must do so for “justified cause”. Until now, no White House occupant had tried that kind of measure, so there are no precedents. But analysts consider that, typically, a “justified cause” only the work environment is attached and must be related to any of these three assumptions: a bad performance in the workplace, abandonment of functions or prevarication. In a statement, Cook’s lawyers have greeted the judge’s decision. “The opinion recognizes and reaffirms the importance of maintaining the independence of the Federal Reserve against illegal political interference.”
