Interest rate policy
Fed director Cook sues US President Trump
Fed board member Cook does not like her dismissal by US President Trump-and is now going against him.
The US Federal Reserve, Lisa Cook, wants to with a lawsuit against Donald Trump prevent the US President from extinguishing her in the Federal Reserve (FED). The dismissal was illegal and should be stopped by an injunction, it said in a corresponding court document. Cook justified her complaint that a president may not simply deduct a member of the central bank confirmed by the Senate – also because it threatens the independence of the Fed.
Trump had announced on his Truth Social platform at the beginning of the week to relieve Cook with immediate effect from her office. In a letter to the economist, he justified the step with the fact that there were sufficient reasons to assume that she had given incorrect information in one or more mortgage contracts. Cook then announced legal steps through her lawyers. She argued that the president should not fire her at all.
Trump insists on interest reductions
With Cook’s lawsuit, the power struggle between Trump and the US Federal Reserve goes into the next round. Trump has been pounding interest cuts for months, but does not get it from the central bank. Therefore, he has repeatedly requested the resignation of the current FED leader Jerome Powell and now also targeted Cook.
The FED is of great importance worldwide. The Central Bank of the United States is aimed at contributing to the US financial stability. The FED determines interest rates, for example, which has a major impact on loan costs. The effects can also be felt in Germany – for economic growth and on the financial markets in the euro area.
dpa
Source: Stern
