President Donald Trump said that he dismisses “immediately effect” Lisa Cook, official of the federal reserve, giving an extremely clear signal in his fight against the US Central Bank, notes the BBC
In an announcement made on his social media platform, Trump posted a letter to Cook informing him about his decision to remove him from the bank's board of directors.
He said that there are “sufficient reasons” to believe that he made false statements about the mortgage contracts and invoked the constitutional powers that, he says, allowed him to dismiss it.
Neither Cook nor the federal reserve commented on the dismissal, announced by the president on Monday night.
Trump has put increasing pressure on the Fed – especially on its president, Jerome Powell – in recent weeks because of what he considers to be the reluctance of the central bank to reduce interest rates. He has repeatedly evoked the possibility of dismissing Powell.
His decision to dismiss Cook, who is one of the seven members of the Fed Governors Council and the first African-American woman holding this position, is considered to be unprecedented in the 111-year history of the Central Bank.
It is also likely to raise legal questions, the experts suggesting that the White House will have to prove – possible in court – that it had sufficient reasons to dismiss it.
According to Trump's letter, Cook has signed a document attesting that a Michigan property will be its main residence for the following year.
“Two weeks later, you signed another document for a property in Georgia, stating that this will be your main residence for the next year,” said the president.
“It is inconceivable not to have been aware of your first commitment when you took the second,” he wrote.
The president asked for the resignation last week due to the allegations of mortgage fraud, which were initially formulated in a public letter addressed to the Attorney General Pam Bondi by the authority to regulate the financing of housing, Bill Pulte, an ally of Trump.
The regulatory authority in the field of financing of housing called the letter a “criminal referral” and urged the Department of Justice to investigate. It is not clear if an investigation has been opened.
In a statement issued last week for the BBC, Cook said he learned about the press charges, and the problem comes from a mortgage application that he submitted four years ago, before joining the central bank.
“I have no intention to be intimidated to retire from office because of high questions in a tweet,” she said.
“I intend to take seriously any questions about my financial history as a member of the federal reserve and, therefore, I gather the correct information to answer any legitimate questions and provide facts.”
If Cook or Fed opposes Trump's decision to remove it, this could trigger a confrontation between the central bank and the White House. Fed has earned its independence from the US government in 1951.
Trump expressed an increasing animosity towards Powell, calling him “idiot” and “stubborn cat” because he did not support the president's calls for rapid and major discounts of interest rates.
But last week, Powell increased expectations for a reduction in interest rate in September. In an interview with central bankers gathered at Jackson Hole, Wyoming, he also claimed that the inflationary impact of Trump may prove temporary.
