Trump takes his Fed fight to unprecedented level with effort to fire Cook

NEW YORK/ WASHINGTON: US President Donald Trump has taken his feud with the Federal Reserve to an unprecedented extreme with his effort to fire Governor Lisa Cook, kicking off what could be a protracted legal battle that risks resetting long-established norms for the central bank’s independence and a president’s involvement in monetary policy.

Long feared as a move that would tip global financial markets into disarray, Trump’s announcement late Monday that he would remove Cook immediately over questions raised over mortgages she took out before she joined the Fed was met with a muted response on Tuesday.

Wall Street’s main indexes opened slightly lower, while bond yields reflected higher expectations for a near-term Fed rate cut and also a bit less confidence in the central bank’s inflation-fighting credentials. But asset moves so far showed little indication of outright panic.

Trump said in a letter to Cook, the first African-American woman to serve on the Federal Reserve’s governing body, that he had “sufficient cause to remove you from your position” because in 2021 she had indicated on documents for separate mortgage loans on properties in Michigan and Georgia that both were a primary residence where she intended to live.

Cook responded several hours later in a statement emailed to reporters through the law office of Abbe Lowell, saying of Trump that “no causes exist under the law, and he has no authority” to remove her from the job she was appointed to by former US President Joe Biden in 2022. “I will continue to carry out my duties to help the American economy.”

Lowell said that Trump’s “demands lack any proper process, basis or legal authority. We will take whatever actions are needed to prevent this attempted illegal action.”