US President Donald Trump has been saying for a long time that the Fed should cut interest rates, stating that the economic situation is good.
Trump, who has frequently pressured the FED and FED Chairman Jerome Powell on this issue and called for their resignation, showed how serious he is about interest rate cuts with his latest move.
Accordingly, Trump announced in a post on his Truth Social account that he had dismissed FED member Lisa Cook, whose resignation he had recently called for.
Trump stated that the US Constitution and the Fed law allow and authorize the removal of a board member if there is cause.
At this point, Trump stated that he had sufficient reason to dismiss Lisa Cook on the grounds that she made false statements in mortgage agreements.
“By virtue of the authority granted by Article II of the United States Constitution and the Federal Reserve Act of 1913 (with amendments), you are hereby removed from your position on the Federal Reserve Board of Governors, effective immediately.
The Federal Reserve Act provides that you may be removed from office for cause at my discretion. (See 12 USC § 242). I have determined that there is sufficient cause for your removal.”
Lisa Cook, appointed by former President Joe Biden, responded with a harsh statement after Trump claimed he fired her:
Cook stated that President Trump “does not have the authority” to remove him from office.
“President Trump acted as if he fired me for cause, even though there was no legal justification for doing so and he had no authority to do so.
I will not resign and will continue to work to support the US economy, as I have done since 2022. I will continue to do my job.”
Trump’s dismissal of Fed member Lisa Cook was a first in US history. Experts stated that Cook’s removal would give Trump a majority at the Fed, allowing him to easily lower interest rates.
*This is not investment advice.