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Yesterday evening, President Trump became the first sitting US president to attempt to fire a Federal Reserve governor. He was also the first to do so via social media.
In a letter posted to Truth Social, the president cited allegations that Fed Governor Lisa Cook committed mortgage fraud as “sufficient reason” to oust Cook. But, like Leonardo DiCaprio in Wolf of Wall Street, Cook made it clear that she ain’t leaving.
“I will not resign,” Cook said in a statement, noting that the president had “no authority” to fire her. Her lawyer announced this afternoon that Cook will file a lawsuit contending her dismissal. Whether or not allegations of fraud are enough cause is an open question that will likely need to be answered by the Supreme Court, in what is widely expected to be a protracted legal battle.
That leaves Cook, whose term as a Fed governor doesn’t end until 2038, in limbo. It also gives Trump a further foothold in the Fed, where he’s already set to replace retiring Governor Adriana Kugler. If he can successfully give Cook the boot, that would allow him to nominate his fourth appointee in the Fed—giving him a majority on the Fed’s seven-member board, a big step in reshaping the central bank in his image.
Trump’s attempted firing is just the latest salvo in his campaign against the Fed, and while the stock market has responded harshly at the idea of dismissing Chair Jerome Powell in the past, it took today’s news in stride—giving the president no reason to back down, and every reason to keep pushing the Fed to the brink.—MR