President of the United States tried to fire Lisa Cook to increase his influence over the American central bank
The Supreme Court indicated this Wednesday (21) that it tends to keep the director of the Federal Reserve (Fed) in office, which represents a setback to the president’s attempt to dismiss her and expand his influence over the American central bank.
During the hearing, most justices expressed skepticism about the government’s effort to remove Cook based on allegations of mortgage fraud, which she denies. No president has fired a sitting director in the 112-year history of the Fed, an institution created to operate independently of day-to-day politics.
Minister Brett Kavanaugh said allowing the firing would “weaken, if not destroy, the Fed’s independence.” At least five other ministers also raised doubts about the legality of the initiative. Cook and the Fed president, , watched nearly two hours of arguments in court.
Trump’s critics claim that the offensive is set against the backdrop of the president’s desire to exercise greater control over interest rate policy. If Cook is removed, Trump could nominate a replacement and obtain a majority on the Fed board, a scenario closely watched by investors, given the potential impact on markets and the economy.
The Court is considering whether Cook can remain in office while contesting the dismissal. Lower courts authorized its stay, and ministers can simply deny the government’s emergency appeal, letting the case proceed in lower courts. The confrontation intensified with the opening of a criminal investigation against Powell by the Department of Justice (DoJ), a move that the Fed president classified as a “pretext” to pressure monetary policy.
The government maintains that Cook would have declared two properties as primary residences in 2021, which could reduce financing costs. The defense claims that there was no fraud or criminal accusation, and that the case is based on an isolated reference in documents, incompatible with other formal statements made by Cook.
*With information from Estadão Conteúdo
Published by Nícolas Robert
[jp-related-postsids=”20973562097579″[jp-related-postsids=”20973562097579″
