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Washington D.C.- An appeals court on Monday blocked former President Donald Trump‘s attempt to immediately remove federal Reserve Governor Lisa Cook from her position, allowing her to continue serving while her lawsuit against him proceeds. The ruling preserves the current composition of the Federal Reserve’s policy-making committee as it prepares to meet this week.
Cook is suing Trump after he terminated her position in late August, alleging she committed mortgage fraud – a claim she has called “unprecedented and illegal.” The court’s decision marks a notable setback for Trump, who has increasingly criticized the Federal Reserve and its monetary policy, particularly its decisions regarding interest rates. This case raises concerns about the potential for political interference in the traditionally self-reliant Federal reserve.
The policy-making committee, comprised of seven governors and a rotating lineup of regional bank presidents, is scheduled to meet Tuesday and Wednesday. Analysts widely expect the committee to cut the fed’s benchmark rate at the meeting. Unless the Supreme Court intervenes, Cook will be able to participate in the vote.
Trump’s efforts to influence the Federal Reserve extend beyond Cook’s dismissal. He has previously criticized the committee for keeping interest rates elevated and has specifically targeted Fed Chair Jerome Powell. Monday also saw the Senate confirm Trump’s pick to fill a vacant spot on the board of governors.
Some economists are concerned that these recent developments could lead to political considerations influencing future Fed decisions,possibly resulting in higher inflation. The Federal Reserve operates with the goal of maintaining stable prices and full employment, and its independence is considered crucial to achieving those objectives.
