Right puts a stick between Trump’s attempt to dismiss Fed member

A federal judge in Washington has temporarily set a line by attempting President Donald Trump to put Federal Reserve government Lisa Cook out of her position.

This gives the legal struggle over the independence of the Central Bank (Federal Reserve) a remarkable turn. The question now is: Can a president firm a FED governor based on events from before his appointment?

Insufficient grounds for dismissal

Judge Jia Cobb ruled that the accusations of mortgage fraud, which would date from before Cooks appointment in 2022, are probably not enough to put her out of her position. “President Trump has not argued that indicates that Cook is unfaithful or ineffective,” Cobb wrote in her provisional statement as a board member.

Cook itself denies any form of fraud. According to her lawyers, the case is nothing but a politically motivated attempt to remove her because of her policy posture.

Never before has a president tried to fire a FED governor. The law stipulates that this can only be “for well -founded reasons”, but a clear definition is missing. According to Judge Cobb, it states in the law that a FED governor can only be removed due to misconduct during the office.

This touches the case at the core of the independence of the Federal Reserve. When a president himself determines whether he can intervene, there is a risk that political considerations will determine the course of the central bank, with consequences for both interest rate policy and the fight against inflation.

FED meeting in September can shake in the market

Trump has attacked the Fed brighter in recent months. He wants the central bank to quickly and considerably lower interest and expressed sharp criticism of chairman Jerome Powell. On September 16 and 17, the Fed meets again about the interest, where a reduction is expected. A lower interest rate usually has a positive effect on broad markets, from shares to crypto, because there will be more capital.

Cobb’s preliminary statement prevents the Fed Cooks from taking dismissal as long as the lawsuit runs. Analysts expect the issue to end up at the US Supreme Court.

Justice starts investigating alleged mortgage fraud

In the meantime, the US Department of Justice has opened a criminal investigation into the alleged mortgage fraud, with Grand Jury-subpoenas in Georgia and Michigan. Cook emphasizes that she “never committed mortgage fraud”.

The outcome of the lawsuit can have far -reaching consequences. If the judiciary blocks the dismissal, the independence of the FED is re -confirmed. But if Trump is right, the door can be open to future presidents to directly influence monetary policy.