Trump Fires Federal Reserve Governor Cook, Sparking Constitutional Storm What's Going On?
US President Trump announced on the 25th that he had fired Federal Reserve Governor Cook, citing alleged mortgage loan fraud, a move described by mainstream American media as "unprecedented" and sparking controversy. Cook immediately responded strongly, stating that Trump had no right to fire her and that she would sue through her lawyer.
Trump posted a letter addressed to Cook on his social media platform Truth Social, announcing the immediate removal of her position, citing that she "was involved in fraud in financial matters, which may constitute criminal behavior," and stated that the action was based on the 1913 Federal Reserve Act and the presidential powers under the US Constitution's Article II.
In response, Cook's lawyer Lowell refuted, saying, "President Trump's dismissal of Cook lacks factual basis and legal authority, and we will sue against this illegal action." Cook herself said, "I will not resign, I will continue to fulfill my duties and support the US economy."
According to the Federal Reserve Act, the president can only "for cause" remove a Federal Reserve governor, but the law does not clearly define what "for cause" means. Generally, such "for cause" typically refers to misconduct or serious negligence during the term of office.
The "loan fraud" accusation against Cook occurred before she became a governor. Last week, the head of the Federal Housing Finance Agency, Pulley, accused Cook of simultaneously declaring two properties in Michigan and Georgia as "primary residences," i.e., places of primary residence, to obtain more favorable interest rates. Pulley has submitted a criminal complaint to the Department of Justice, and the Department is currently investigating, but has not yet filed any charges.
This incident quickly escalated into a potential constitutional crisis. Several Democratic lawmakers criticized the move as unconstitutional and dangerous. Senator Warren condemned it sharply, saying, "Trump's actions are a blatant violation of the Federal Reserve Act and must be overturned in court."
Senate Minority Leader Schumer described Trump as playing "a game of Jenga that could push the foundation of the US economy to the brink of collapse." He warned that if the White House successfully removed Cook and installed allies, the Federal Reserve would lose its status as an independent central bank, thereby threatening the savings and loan rates of all Americans.
Cook has now appointed lawyers to prepare for a federal lawsuit and may take the case to the US Supreme Court. According to a ruling by the US Supreme Court in May this year, the Federal Reserve is a "structurally unique, historically traditional quasi-private institution" and should not be subject to arbitrary interference by the president.
Cook was nominated as a Federal Reserve Governor by former President Biden in 2022, with a term until 2038. She is the first African-American woman to serve as a Federal Reserve Governor in history, with permanent voting rights and participation in setting benchmark interest rate policies. She has publicly criticized Trump's trade policies, which she believes could harm US productivity and force the central bank to raise interest rates in adverse economic conditions to curb inflation.
If Cook is ultimately successfully removed, Trump will have an important nomination opportunity, potentially reshaping the composition of the board. Currently, two of the seven Federal Reserve governors were nominated by Trump, namely Bowman and Waller. Trump has also nominated his economic advisor Milan as a new governor.
This is not the first time Trump has attacked the Federal Reserve. In recent months, he has frequently criticized Federal Reserve Chair Powell for refusing to comply with his demand for rate cuts, even openly calling Powell "stupid" and "ashamed." He has also repeatedly urged Powell to resign early.
Source: rfi
Original: www.toutiao.com/article/1841566096872458/
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