Cable News Clips

Evidently, he was serious — at least about his intentions. NBC News reported:

President Donald Trump is removing Federal Reserve Governor Lisa Cook effective immediately, according to a letter he posted to Truth Social on Monday night. In the letter, Trump writes: ‘Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.’

This is a story with a lot of moving parts, so let’s unpack the relevant details and review what we know.

Who’s Lisa Cook?

Joe Biden appointed Cook, an accomplished economist, to the Federal Reserve’s board of governors three years ago, and at that point, she became the first Black woman to serve on the Fed board. Her tenure has been uncontroversial, at least until last week.

.......Are the allegations credible?

There’s reason for skepticism. Pulte is both a critic of the Fed and a White House loyalist — The Washington Post, for example, recently described the FHFA chief as “a prominent Trump sidekick” — who’s conveniently started going after a variety of Trump targets with dubious claims of mortgage fraud.

......Has the U.S. Supreme Court weighed in on the subject?

As a matter of fact, it was just three months ago when Republican-appointed justices granted the president considerable power to oust officials serving in independent agencies, but simultaneously, the high court explicitly said that the Federal Reserve is a “uniquely structured, quasi-private entity.” That distinction appears to limit Trump’s powers over the Fed.

Why would Trump be so eager to target the Fed in the first place?

Because the White House wants to seize control over U.S. monetary policy, especially as it relates to interest rates. Trump has already launched an unprecedented campaign against Fed Chairman Jerome Powell, and if the president is able to force out Cook and replace her with someone who’ll do the White House’s bidding, it would gut the institution’s independence and shift power in the Oval Office’s direction.

Why would that be dangerous?

Because, as Paul Krugman explained, the Fed is responsible for everything from interest rates to bank supervision to avoiding systemic financial crises. If Trump successfully corrupts the institution and its work, Krugman said, “We become Venezuela. We become Turkey. We become a place where all of this stuff is just at the whims of the strongman in charge. ... No president should have the power to just arbitrarily control what the Fed does, and least of all this president. So, this is the road to things going completely wild — not five years down the pike, but months from now.”

He added, “This is a five-alarm fire.”