The United States has fueled Governor Lisa Cook continuing Trump’s administration to block the attempt to fire him

The governor of the American federal reserve, Lisa Cook, continued the Trump administration in order to overthrow the president’s attempt to dismiss her, launching an unprecedented legal battle which could considerably reshape the longtime political independence of the Fed.

The trial requires an injunction to block your shot and “confirm your status” as a member of the Fed board of directors.

The case could become a turning point for the 112 -year -old federal reserve, which was designed by the Congress to be isolated from daily political influence. Economists prefer independent central banks because they can more easily take unpopular measures – such as the lifting of interest rates to combat inflation – than elected officials cannot.

Many economists fear that if the Fed falls under the control of the White House, it will maintain its key interest rate lower than that of economic fundamentals to meet the requests of Trump.

This could allow inflation to increase more quickly and could also increase interest rates in the longer term, such as those of mortgages and car loans. Investors can require higher return to have obligations to compensate for an increase in inflation in the future, which increases loan costs throughout the economy.

“If Cook wins, she stays in place and we make a semblance of stability,” said Peter Conti-Brown, professor of financial regulation at the University of Pennsylvania in a substitution position. “If she loses … This is the end of the independence of the Fed because it was built and rebuilt over 112 years.”

No president sought to dismiss a governor of the Fed until Donald Trump displays a letter on his social media platform of truth on Monday evening by saying that Cook had been dismissed. Trump said the reason for her dismissal was allegations that she had committed mortgage fraud in 2021, before she was appointed to the board of directors.

The United States Supreme Court said that the president could not dismiss leaders of the Fed for policy differences, but he can do so “for good”, which generally means a fault or negligence. Cook has not been accused of any crime.

The trial, tabled by Cook’s lawyer, Abbe David Lowell, argues that allegations do not imply cook’s fault during his mandate and have not been proven. Cook should also have had the opportunity to respond to the accusations, said the prosecution.

“The non -founded and not proven allegation according to which the governor Cook Cook ‘potentially’ ‘made an error by filling out a mortgage form before its confirmation of the Senate does not amount to” provoking “”, according to the trial.

“Allowing the president to withdraw members of the board of directors for political disagreements would also make the independence of the council illusory,” said the prosecution.

The president’s decision comes because he has repeatedly attacked the president of the Fed, Jerome Powell, and the other members of the Fed interest rate adjustment committee for not having reduced the short -term interest rate that they control more quickly. It currently amounts to 4.3%, after the Fed decision -makers reduced it from a full point at the end of last year. Trump said he thought it should be as low as 1.3%, a level as no Fed official and few economists support.

The trial maintains that allegations of mortgage fraud are simply a pretext for Fire Cook because it has not voted to reduce interest rates. “The mortgage allegations against it are pretextual, in order to carry out its rapid withdrawal and leave a seat so that President Trump fill and transmit his program to undermine the independence of the federal reserve.”

Powell pointed out last week that the central bank was leaned towards the reduction of its rate at its next meeting from September 16 to 17, but it is likely that the Fed will reduce its key rate more slowly than Trump.

If Trump can replace Cook, it may be able to obtain a majority of 4-3 on the Fed Board of Directors. Trump appointed two members of the board of directors at his first mandate and appointed a key economic adviser to the White House, Stephen Miran, to replace Adriana Kugler, another Fed governor who resigned unexpectedly on August 1.

Trump said he wouldn’t call people from the Fed who will support lower rates.

The Fed exercises extensive power over the American economy by adjusting a short -term interest rate which can influence wider borrowing costs for things such as mortgages, car loans and commercial loans.