Trump raises pressure on central bank, calls for Fed governor to resign

New Straits Times

19 hours ago

WASHINGTON: President Donald Trump ramped up pressure on the US central bank Wednesday, calling for Federal Reserve Governor Lisa Cook to step down – after his recent criticism of Fed Chair Jerome Powell for not lowering interest rates sooner.
"Cook must resign, now!!!" Trump wrote on his Truth Social platform, while sharing a Bloomberg news report on how the Federal Housing Finance Agency's director has called for greater scrutiny of Cook over a pair of mortgages.
FHFA director Bill Pulte – a staunch ally of Trump – had reportedly written a letter to the US attorney general calling for an investigation of Cook while suggesting that she might have committed a criminal offense.
The Trump administration has pursued allegations of mortgage fraud against high-profile Democrats who are seen as political adversaries of the president.
It was not immediately clear if such a probe will take place targeting Cook, the first Black woman to serve on the central bank's board.
The president is also limited in his ability to remove officials from the central bank.
A Supreme Court order recently suggested that Fed officials cannot be taken out of their jobs over policy disagreements, meaning they have to be removed for "cause," which could be interpreted to mean wrongdoing.
The US leader's targeting of Cook, who sits on the Fed's rate-setting committee, comes after his repeated broadsides against Powell while the central bank kept the benchmark lending rate unchanged this year.
On Tuesday night, Trump again called for a "major rate cut," saying there was "no inflation" and claiming that the Fed's policymaking was harming the housing industry due to elevated mortgage rates.
He called Powell "a disaster" in a social media post.
Although the US consumer price index, a key inflation gauge, was steady at 2.7 per cent in July, it remains higher than it was a few months earlier.
Fed officials have been trying to ensure inflation is kept in check – despite the effects of Trump's sweeping tariffs – while balancing risks to the labor market as they mull the right time for further rate cuts.
Cook took office as a Fed governor in May 2022 and was reappointed to the board in September 2023. She was sworn in later that same month for a term ending in 2038.
She has previously served on the Council of Economic Advisers under former president Barack Obama.
Earlier this year, Trump suggested that what he called an overly costly renovation of the Fed's headquarters could be a reason to oust Powell, before backing off the threat.
Powell's term as Fed chair ends in May 2026. —AFP