US supreme court rules Trump’s firing of Lisa Cook from Fed was unconstitutional
Summary
The US Supreme Court ruled that President Trump’s firing of Federal Reserve Governor Lisa Cook without cause was unconstitutional. This decision protects the Fed’s independence by limiting a president’s power to remove central bank officials.Key Facts
- Lisa Cook, appointed by President Biden, was fired by President Trump last August on social media accusations of mortgage fraud; she denied the claims.
- The Supreme Court said the president cannot remove a Federal Reserve governor without a valid reason.
- Cook’s term on the Fed board is set to last until 2038; she is the first Black woman on the Fed’s board.
- The ruling is a change from other recent court decisions that generally gave President Trump broad powers.
- The Federal Reserve sets key interest rates that affect the entire US economy.
- President Trump had frequently criticized the Fed for keeping interest rates high, which he felt hurt the economy.
- Jerome Powell, former Fed chair appointed by Trump, faced investigations related to renovations at the Fed headquarters but remained a governor to protect Fed independence.
- Kevin Warsh replaced Powell as Fed chair and may support lowering interest rates despite inflation concerns.
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