Trump Moves To Depoliticize Fed Through Loyalty Test
President Donald Trump renewed his campaign to protect the Federal Reserve from political interference Wednesday by insisting that Fed Governor Lisa Cook be removed unless she becomes more politically agreeable to President Donald Trump. Cook said there was “no legitimate basis” to dismiss her, prompting the administration to revive disputed mortgage-fraud allegations after the Supreme Court ruled 5-4 on June 29 that Trump’s previous attempt had denied her proper notice and an opportunity to respond. The White House has corrected that procedural defect by giving Cook 21 days to participate in due process before receiving the result already selected for her.
“Nobody respects an independent Federal Reserve more than me,” Trump said. “It should be completely independent of Lisa Cook, independent of interest rates I don’t like, and especially independent of making decisions before checking whether those decisions help Donald Trump.” White House officials said the statement demonstrated Trump’s long-standing commitment to central-bank autonomy, provided autonomy remains supervised, politically reliable and available for immediate presidential inspection. Officials added that Cook could prove her independence at any time by agreeing with Trump without being explicitly ordered to do so.
Cook’s attorneys said any errors in her mortgage documents were inadvertent and that she had been transparent with her lender. The explanation intensified administration concerns that Cook may possess the dangerous central-banking trait known as an explanation. Under the White House’s updated standard, disputed paperwork constitutes sufficient cause to remove a governor when accompanied by the more serious offense of resisting presidential interest-rate preferences. Governors will remain free to agree with Trump, resign voluntarily or receive a formal letter explaining that disagreement has independently caused their dismissal.
Administration officials stressed that removing a Fed governor over contested allegations while the president publicly demands lower rates would not politicize monetary policy. Instead, they said, it would liberate the central bank from economists, statutes, fixed terms and the obsolete belief that “independent” means independent. Markets welcomed the new clarity, reassured that future rate decisions may still consider inflation, employment and economic growth after analysts determine whether Trump has posted about them in all capital letters. The Federal Reserve is now fully independent because the president will personally decide who is allowed to exercise its independence.
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