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    Federal Reserve governor will keep job for now despite Trump’s bid to remove her

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    Lisa Cook, the US Federal Reserve governor, will keep her job for now, despite Donald Trump’s extraordinary bid to remove her from the central bank’s board with immediate effect.The US supreme court deferred action on the Department of Justice’s request to allow the president to fire Cook, at least until it hears oral arguments on the case in January.Trump has launched an unprecedented campaign to exert greater control over the Fed, publicly lambasting the US central bank over its decisions, installing a close ally on its board of governors, and attempting to fire Cook.His battle for influence has raised questions over the independence of the Fed, which for decades has steered the US economy without political interference.Trump tried to “immediately” dismiss Cook in August, citing unconfirmed allegations of mortgage fraud dating back to before she joined the Fed in 2022. She has denied wrongdoing, and argued the president has no authority to fire her.On Wednesday morning the supreme court considered his attempt to remove Cook – the first-ever bid by a president to fire a Fed official – and the administration’s complaints about judge’s order which had temporarily blocked Trump from firing her while litigation over the termination continues in a lower court.The justices declined to immediately decide a justice department request to put on hold the judge’s order, enabling Cook to stay in post for now.Abbe Lowell, of Lowell & Associates, and Norm Eisen, of the Democracy Defenders Fund, representing Cook, in a statement said: “The court’s decision rightly allows Governor Cook to continue in her role on the Federal Reserve board, and we look forward to further proceedings consistent with the court’s order.”The justice department was contacted for comment. Karoline Leavitt, the White House press secretary, said the administration was looking forward to oral arguments before the court.Carl Tobias, at the University of Richmond School of Law, suggested that the decision to keep Cook in place, and the court’s announcement that it would hear oral arguments on the merits of the case in January, were “good signs for both sides”.“It does protect the independence of the Fed, at least in the short term,” Tobias told the Guardian. “The one big question is: even if they have arguments in January, when will they issue the ruling? That could come early, because I expect the government will ask them to expedite everything, but it could be as late as June.”The court’s decision to maintain the status quo in the short term should allow markets to “settle down” and mitigate the uncertainty around the Fed, he added.In creating the Federal Reserve in 1913, Congress passed a law called the Federal Reserve Act that included provisions to shield the central bank from political interference, requiring governors to be removed by a president only “for cause”, though the law does not define the term nor establish procedures for removal. The law has never been tested in court.skip past newsletter promotionafter newsletter promotionJia Cobb, a Washington-based US district judge, on 9 September ruled that Trump’s claims that Cook committed mortgage fraud before taking office, which Cook denies, were probably not sufficient grounds for removal under the Federal Reserve Act.Cook, the first Black woman to serve as a Fed governor, sued Trump in August after the president announced he would remove her. Cook has said the claims made by Trump against her did not give the president the legal authority to remove her and were a pretext to fire her because of her monetary policy stance.Trump has made no secret of his plans to influence the Fed, publicly describing plans to swiftly build “a majority” on its interest-rate setting committee of policymakers.He has repeatedly broken with precedent to demand rate cuts, and attack senior Fed officials, including its chair, Jerome Powell, when they repeatedly defied these calls.Powell has repeatedly stressed he is “strongly committed” to maintaining the Fed’s independence. His term as chair is due to end next year. The Trump administration has been drawing up plans to appoint a successor.Reuters contributed reporting More

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      Lisa Cook urges supreme court to reject Trump’s bid to fire her from Fed board

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      Federal Reserve governor Lisa Cook urged the US supreme court on Thursday to reject Donald Trump’s attempt to fire her, telling the justices the Republican president’s unprecedented move would destroy the central bank’s independence and disrupt financial markets.Lawyers for Cook filed a written response opposing the justice department’s 18 September emergency request to lift a federal judge’s order that blocked Trump from immediately removing Cook, an appointee of Democratic former president Joe Biden, while her legal challenge continues.Granting Trump’s request, her lawyers told the supreme court, “would dramatically alter the status quo, ignore centuries of history and transform the Federal Reserve into a body subservient to the president’s will”.Washington-based US district judge Jia Cobb ruled on 9 September that Trump’s claims that Cook committed mortgage fraud before taking office – allegations that Cook denies – likely were not sufficient grounds for removal under the 1913 law that created the Fed.The US court of appeals for the District of Columbia circuit in a 2-1 ruling on 15 September denied the administration’s request to put Cobb’s order on hold, ruling that Cook likely was denied due process in violation of the US constitution’s fifth amendment.In Thursday’s filing, Cook’s lawyers said the Fed’s “unique history of independence” has helped make the US economy the strongest in the world. Siding with Trump, they wrote, “would signal to the financial markets that the Federal Reserve no longer enjoys its traditional independence, risking chaos and disruption”.Cook, the first Black woman to serve as a Fed governor, sued Trump in August after the president announced he would remove her. Cook has said the claims made by Trump against her did not give him the legal authority to remove her and were a pretext to fire her for her monetary policy stance.Earlier on Thursday, a group of 18 former US Federal Reserve officials, Treasury secretaries and other top economic officials who served under presidents from both parties urged the supreme court in a brief to reject Trump’s petition to allow his attempt to fire Cook.The group included the past three Fed chairs – Janet Yellen, Ben Bernanke and Alan Greenspan – as well as former Treasury secretaries Henry Paulson, Lawrence Summers, Jacob Lew, Timothy Geithner and Robert Rubin. They argued that letting the president remove Cook while her legal challenge to Trump’s action is ongoing would threaten the central bank’s independence and erode public confidence in it.In its filing to the court last week, the justice department wrote: “This application involves yet another case of improper judicial interference with the President’s removal authority – here, interference with the President’s authority to remove members of the Federal Reserve Board of Governors for cause.”Congress included provisions in the law that created the Fed to shield the central bank from political interference. Under that law, Fed governors may be removed by a president only “for cause”, though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.Trump has pursued a broad vision of presidential power since returning to office in January.The Cook legal battle has ramifications for the Fed’s ability to set interest rates without regard to the wishes of politicians, widely seen as critical to any central bank’s ability to function independently to carry out tasks such as keeping inflation under control.Trump this year has demanded that the Fed cut rates aggressively, berating Fed chair Jerome Powell for his stewardship over monetary policy as the central bank focused on fighting inflation. Trump has called Powell a “numbskull”, “incompetent” and a “stubborn moron.“Trump on 25 August said he was removing Cook from the Fed’s board of governors, citing the allegations that, before joining the central bank in 2022, she falsified records to obtain favorable terms on a mortgage. In blocking Cook’s removal, the judge found that the 1913 law only allows a Fed governor to be removed for misconduct while in office. The mortgage fraud claims against Cook relate to actions prior to her Senate confirmation in 2022. More

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      Jerome Powell dismisses Trump’s criticism of ‘political’ Fed as ‘cheap shot’

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      The US Federal Reserve chair, Jerome Powell, pushed back hard against claims the central bank allows politics to drive decisions, in the midst of an extraordinary battle over its independence.Donald Trump, who is seeking to increase his administration’s control over the Fed, has branded Powell “a very political guy” after he declined to bow to the president’s public demands for drastically lower interest rates.The White House has launched an unprecedented campaign to overhaul the Fed’s rate-setting board of governors, installing an administration official and trying to fire a Biden appointee over unconfirmed claims of mortgage fraud.But on Tuesday, Powell, who is typically diplomatic when speaking publicly, roundly dismissed one of the common allegations made by Trump and his allies: that the Fed is somehow political when making key decisions about the world’s largest economy.“Many people don’t believe” the Fed is simply allowing economic data to drive its decisions, Powell acknowledged at an event in Rhode Island. “But the truth is, mostly people who are calling us political, it’s just a cheap shot.”He did not mention Trump by name. But the president has become the most prominent critic of the Fed and Powell since returning to office.skip past newsletter promotionafter newsletter promotionIt comes a week after the central bank ordered its first rate cut since December, a move to stabilize a wobbling labor market, even as Trump’s tariffs continue to push up prices.“Near-term risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation,” Powell reiterated on Tuesday.Stephen Miran, the Trump official now serving as a Fed governor, takes a different view. He dissented from every other policymaker on the central bank’s board of governors last week to advocate for a deeper rate cut.“Relatively small changes in some good prices have led to what I view as unreasonable levels of concern,” Miran argued in a speech earlier this week, claiming that tariffs would ultimately lead to “substantial swings in net national savings” for the country.Reuters contributed reporting More

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      The Federal Reserve’s independence is about to be tested like never before

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      The time has come to ban the “revolving door” between the White House and the Federal Reserve, two academics argued last year. Doing so would be “critical to reducing the incentives for officials to act in the short-term political interests of the president”, they wrote.Eight months ago, the two writers – Dan Katz and Stephen Miran – joined the Trump administration in senior roles. On Tuesday, Miran, the chair of the US Council of Economic Advisers, walked into the Fed as a governor.Strolling through the revolving door himself, Miran pledged during his confirmation hearing to preserve the Fed’s independence, but made clear he would not resign from the White House, just take unpaid leave.Having expressed concern last year about the Fed’s vulnerability to the short-term political interests of the president, Miran was rushed into his new seat on the central bank’s board of governors hours before its latest meeting – as Donald Trump continued to push to have another voting member removed.The president, at least, is clearer about aspirations for the Fed. “We’ll have a majority very shortly,” Trump said of the central bank’s rate-setting open market committee last month. “So that’ll be great.”As his efforts to exert greater influence and fire Lisa Cook, a governor appointed by Joe Biden, fuel concern over the Fed’s ability to operate without political interference, Trump was asked by reporters on Tuesday if he thought the central bank was independent. “Oh, it should be,” he replied. “But I think they should listen to smart people, like me.”For a generation, presidents – no matter how smart they may be – have broadly steered clear of publicly expressing opinions for the Fed to listen to. Trump has bulldozed through this norm, calling for drastic rate cuts and attacking Fed chair Jerome Powell for not delivering them.On Wednesday, the Fed finally nudged rates in the direction Trump has been demanding, albeit not at nearly the pace he wants. The benchmark federal funds rate was cut by 25 basis points to a range of between 4 and 4.25%, their lowest level in almost three years, and policymakers indicated more reductions would follow.There was only one dissent: Miran wanted to cut by 50 basis points.If Miran is truly independent from the White House, his first vote on interest rates as Fed governor fell somewhat conveniently in line with the president’s demands for faster, and deeper, cuts than his new colleagues have been minded to execute.Other rate-setting officials have been far more concerned about striking a delicate balance. Of course, they want to shore up the economy – and cutting rates typically spurs activity – but they are also wary of inflation, which has held firm in recent months.The economic impact of Trump’s sweeping tariffs on foreign imports is one thing. But the uncertainty caused by months of erratic threats, declarations, pauses and vague trade pacts with certain economies has so far cast the darker shadow.“Changes to government policies continue to evolve, and their effects on the economy remain uncertain,” Powell, ever the diplomat, put it in a press conference on Wednesday. Risks around inflation are “tilted to the upside”, he added, with risks to the labor market to the downside.Official data for August indicated that price growth is again picking up, and Fed officials have increased their expectations for inflation next year, according to projections released alongside their latest decision.But Trump, and, apparently, Miran, believe concern over higher inflation, and the risk of overheating the US economy by cutting rates too fast, is unfounded.skip past newsletter promotionafter newsletter promotionThe US president, impatient for the Fed to come around to his way of thinking, is trying to change who sits around the table.Miran has secured a seat – at least until the new year. The campaign to remove Cook continues. And Powell’s term as chair will expire next year, enabling Trump to select a new figure to lead the Fed.For now, Trump’s control over the central bank remains limited. Sure, Miran might have voted for a deeper cut, but at this week’s meeting there “wasn’t widespread support at all” for this move, Powell stressed afterwards.The Fed chair expressed confidence that discussions on rates remain unaffected by politics. Such considerations are typically left at the door, he noted, as 12 voting policymakers – out of a pool of 19 – gather at a table to make the decision.“The only way for any voter to really move things around is to be incredibly persuasive,” said Powell. “And the only way to do that, in the context in which we work, is to make really strong arguments based on the data, and one’s understanding of the economy. That’s really all that matters.”“That’s in the DNA of the institution,” he added. “That’s not going to change.”Time will tell. “We’re strongly committed to maintaining our independence,” Powell told reporters. “And beyond that, I really don’t have anything to share.”That strong commitment faces an extraordinary test. “They have to make their own choice,” Trump said of the Fed earlier this week. “But they should listen.” More

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      Federal Reserve cuts interest rates by a quarter point, for first time in nearly a year – as it happened

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      The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market.This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since November 2022.Stay tuned for a press conference Fed chair Jerome Powell is expected to give at 2.30pm ET.The US Federal Reserve cut interest rates by a quarter point today, a move that will reverberate across the economy in the coming months. Fed chair Jerome Powell spoke at a closely watched press conference about the Fed’s decision.Here’s a summary of what happened this afternoon:

      The Fed cut interest rates by a quarter point, the first cut since December 2024. Rates are now at a range of 4% to 4.25%.

      Fed economists also released projections, which point to a majority expecting at least one more rate cut by the end of the year.

      During his press conference, Powell said the rate cut was a move toward “risk management” instead of a testament to the strength of the economy. Economists at the Fed are concerned about a weakening labor market, which could see higher layoffs if worsened.

      But Fed officials are still concerned about inflation. Powell said that prices are likely to continue going up toward the end of the year as companies pass along the price of tariffs to consumers.

      A question remains: Will tariff-related inflation be a one-time price increase, or will it be persistent? Powell said economists at the Fed expect it to be more of a one-time price increase but that the Fed’s just is to make sure it’s not persistent.

      With pressure from the labor market and prices, Powell described it as an “unusual” situation for the Fed to manage. “Our tools can’t do two things at once,” he said.

      Powell also took questions about the recent appointment of Fed governor Stephen Miran, who was confirmed by the Senate on Monday. Powell assured that the Fed’s independence is a priority to the entire committee that sets interest rates. And the Fed’s structure offers protection: For a single member to have outsized influence, they need to “make really strong arguments based on the data and one’s understanding of the economy… That’s in the DNA of the institution.”
      Powell responded to a question about comments new Fed governor Stephen Miran made at his confirmation hearing in front of the Senate earlier this week.Miran said that the Fed actually has a “third mandate”, which is to “moderate long-term interest rates”.The introduction of a third mandate is in opposition to how Powell has framed the Fed’s “dual mandate” – balancing unemployment and price increases.“We always think of it as the dual mandate,” Powell said, explaining that moderate interest rates come from stable inflation.“As far as I’m concerned, there’s no thought of … incorporating that in a different way,” he said.Markets appear to be relatively unresponsiveness to the Fed’s highly anticipated rate cut. Both the S&P and Nasdaq are both slightly down for the day, while the Dow is up.It’s a stark contrast to last week, when markets shot up at data that showed wholesale prices falling slightly in August, and consumer inflation being within expectations for the month.The overall picture that Powell has painted of the economy in his press conference isn’t necessarily one that’s thriving. Powell said that the economy has left the Fed in an “unusual” situation, and said that the Fed’s rate cut is more about “risk management” rather than an testament to a strong economy. The recent rate cut could cause inflation to rise, but risks of the job market worsening under current rates are higher.“We’ve seen much more challenging economic times from a policy standpoint, the standpoint of what we’re trying to accomplish, it’s challenging to know what to do,” Powell said. “There are no risk-free paths now.”Powell was, again, questioned about Stephen Miran’s role as both a new Fed governor and Trump’s chair to the Council of Economic Advisor.A reporter asked Powell how the Fed can be nonpolitical if one of its voting members is explicitly connected to politics. Powell emphasized that there are 12 voting members and 19 total participants on the board.“The only way for any voter to really move things around is to be incredibly persuasive, and the only way to do that in the context in which we work is to make really strong arguments based on the data and one’s understanding of the economy,” Powell said. “That’s really all that matters. … That’s in the DNA of the institution, that’s not going to change.”A Politico reporter asked Powell how Americans will be able to tell if the Fed, which has historically been nonpartisan, starts to be partisan.“We don’t frame these questions at all or see them in terms of political outcomes. In another part of Washington, everything is seen through the lens of does it help or hurt this political party, this politicians,” Powell said. “That’s the framework. People find it hard to believe that’s not at all the way we think about things at the Fed. We take a longer perspective, we’re trying to serve the American people as best as we can.”“I think you would be able to tell. I don’t think we’ll ever get to that place.”When asked about Fed governor Lisa Cook’s lawsuit against Donald Trump for her firing (a court reinstated her last week), Powell said: “I see it as a court case that I would see as inappropriate for me to comment on.”Powell said that Fed officials are expecting inflation from tariffs to be a one-time price level increase, though “we can’t just assume that, [and] or job is to make sure that’s what happens.”“We continue to expect it to move up,” Powell said of prices. “Maybe not as high as we would have expected it to.”He added that the case for “persistent inflation” is weaker.Which is why the Fed cut rates, what he described as a “neutral” policy, given that inflation isn’t out of control, but the labor market has slowed down.But Powell acknowledged that it’s “an unusual situation” – the Fed would most likely want to be more careful with rate cuts because of inflation, but has to be wary of the labor market.“Our tools can’t do two things at once,” he said.Powell is again describing the labor market as being in a “curious balance” – a term that he first used in his Jackson Hole speech last month.The labor market is balanced out, meaning that the supply of workers is on par with the demand that employers have for workers, but it’s not necessarily a sign of strength.Because of immigration, “the supply of workers is coming down”, Powell noted. “At the same time, demand for workers has come down quite sharply to the point where we see what I’ve called a ‘curious balance’.”“Typically, when we say things are in balance that sounds good,” he added. “But in this case, the balance is because both demand and supply have come down sharply, now demand is coming down more sharply because we now see the unemployment rate going up.”A reporter asked Jerome Powell about Stephen Miran’s appointment, specifically on the fact that Miran is the first Fed governor to also have a role in the executive branch while also serving on the Fed board. Miran is the chair of the Council of Economic Advisors.“The committee remains united in pursuing our dual mandate goals,” Powell said in response. “We’re strongly committed to maintaining our independence and beyond that, I really don’t have anything to share.”Fed chair Jerome Powell just started his press conference on the Fed’s rate cut decision.As outlined in the board’s statement, Powell said that the unemployment rate, while still generally low, has edged up.“Job gains have slowed and the downside risks to unemployment have risen,” he said.Powell pointed to new immigration policy as a major factor in the labor market slowdown.“A good part of the slowing likely reflects a decline in the growth of the labor force, due to lower immigration and lower labor force participation,” Powell said. “Even so, labor demand has softened and the recent pace of job creation appears to be running below the breakeven rate needed to hold the unemployment rate constant.”The median projection for the unemployment rate, which is currently at 4.3%, sees it rising to 4.5% by the end of the year.Powells also said higher tariffs have begun to push up some prices in some categories of goods, though the full impact have yet to be seen. Price increases due to tariffs could be a one-time price increase or it could lead to “persistent” inflation.“Our obligation is to ensure that a one-time price increase in the price level does not become an ongoing inflation problem,” he said.Much of this is what Powell said during his speech last month at the Fed’s symposium in Jackson Hole, during which he first suggested that the Fed was looking toward an interest rate cut.In economic projections released after the Fed’s rate-cute decision, members of the Fed’s board submitted their economic predictions for the economy over the next few years.A slight majority of board members seem to expect another rate cut by the end of the year, while a majority see more rate cuts in 2026. Board members are predicting a slight increase in unemployment, though they seem to think that inflation will largely cool in 2026 and 2027.It’s a more dovish take on the economy than how the Fed is describing the current economy in its board statement, where the Fed said that the labor market has slowed and inflation is going up – a dynamic that points to an economic condition known as stagflation.Before Fed chair Jerome Powell can expand on the Fed’s decision in his 2.30pm ET press conference, right now we just have the Fed’s statement on its rate cut to parse through why officials voted for a cut.Notably, the Fed’s rate-setting board took note of the jobs market.“Job gains have slowed, and the unemployment rate has edged up but remains low,” it said. It also noted that “inflation has moved up and remains somewhat elevated”.This is a change from the board’s last meeting in July, when it said that labor market conditions “remain solid”. And this is the first time the board has said inflation is going up.The statement also noted that Stephen Miran, Trump’s appointee to the board who was confirmed on Monday, was the only member of the board to vote against the rate cut. Miran wanted to lower rates by a half-point, instead of a quarter-point.The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market.This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since November 2022.Stay tuned for a press conference Fed chair Jerome Powell is expected to give at 2.30pm ET.Inflation rose slightly in August as companies continued to push the cost of tariffs on to consumers.The newest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year – the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1% after going up in July.Despite this slight uptick in inflation, Wall Street remains optimistic that the Federal Reserve will cut interest rates at the central bank’s board meeting next week. The Fed is under intense pressure from Donald Trump to cut rates, but the decision looks likely to be led by fears that the US jobs market is weakening.Investors are anticipating a quarter-point rate cut. Rates currently stand at a range of 4.25% to 5.5%.The Fed chair Jerome Powell indicated last month that the central bank was gearing up to cut interest rates for the first time this year.For months, policymakers defied public calls from Trump to lower rates – and brushed off his increasingly aggressive criticism of the Fed’s decision to hold them steady.“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said in a closely scrutinized speech at the Jackson Hole symposium in Wyoming, highlighting a “challenging” dichotomy of risks: that Trump’s tariffs might increase inflation, while his immigration policies knock the US labor market.Concerning economic signs, including data indicating that the labor market has stalled while inflation picked up, have reinforced expectations that many policymakers will want to tread carefully in the months ahead.Trump has already suggested that he will be unhappy with the modest cut the Fed is widely expected to unveil later. Powell “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND”, the US president wrote on his Truth Social platform early on Monday, claiming: “HOUSING WILL SOAR!!!”The Trump administration’s extraordinary bid to fire Lisa Cook, a Fed governor appointed by Biden, and remove her from the central bank’s board before this meeting, has so far failed.Late on Monday, a federal appeals court rejected Trump’s request to block Cook from attending the Fed’s latest rate-setting session, which started yesterday.The president cited unconfirmed allegations of mortgage fraud as he attempted to fire Cook, who has denied wrongdoing and argued Trump has no authority to fire her. Her term is not due to expire until 2038.No president has pursued such action – and moved to dismiss a governor at the Fed, which has long been independent from political interference – since the central bank’s founding in 1913.Trump has made no secret of his hopes to increase his oversight of the Fed, calling into question the future of its longstanding independence from political oversight by publicly describing plans to swiftly build “a majority” on its board.The Trump administration raced to strengthen its influence over the Fed ahead of this week’s meeting.Stephen Miran, a senior official who served as chair of the White House council of economic advisers, was confirmed by Senate Republicans as a Fed governor on Monday evening, and formally sworn in on Tuesday.His appointment marks the first time in the history of the modern Federal Reserve, which stretches back almost a century, that a sitting member of the executive branch will also work at the highest levels of the central bank.While Miran described the Fed’s independence as “critical” during a confirmation hearing earlier this month, and pledged to preserve it as governor, his decision to only take unpaid leave from his current job at the White House, rather than resign, raised questions over his ability to operate independently.The US Federal Reserve is expected to announce the first interest rate cut since December as a two-day policy meeting nears its end.The Fed started the meeting on Tuesday, hours after Donald Trump’s new appointee narrowly won confirmation to join the central bank – while Fed governor Lisa Cook continues to fight her removal by the president.Stephen Miran, the chair of Trump’s Council of Economic Advisers, took the oath of office as a Fed governor early on Tuesday after narrowly winning a Senate confirmation vote along party lines on Monday night.There is little doubt that the Fed will make its first interest rate cut of 2025 after the latest gathering, as policymakers pivot towards shoring up a deteriorating jobs market.But concerns about political influence targeting the independent central bank looms over the gathering, as Trump repeatedly bashes Fed Chair Jerome Powell over his rate decisions, and after he moved to fire governor Lisa Cook, sparking a legal battle.On Tuesday, Trump told reporters that the Fed should “listen to smart people like me”. More

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      US treasury secretary reportedly made similar mortgage pledge to Lisa Cook

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      Scott Bessent, the US treasury secretary, previously agreed to occupy two different houses at the same time as his “principal residence”, Bloomberg News reported on Wednesday, an agreement similar to one Donald Trump has called mortgage fraud in his unprecedented bid to fire the Federal Reserve governor Lisa Cook.The Bloomberg report cites Bessent’s mortgages with lender Bank of America and his pledge in 2007 to primarily occupy homes in New York and Massachusetts.Mortgage experts told Bloomberg there was no sign of wrongdoing or proof of fraud in Bessent’s home-loan filings and said the issue highlights incongruities found in such documents.Bank of America did not rely on Bessent’s pledges and never expected him to occupy both homes as his primary residences, Bloomberg reported, citing the mortgage documents.“Nearly 20 years ago, Mr Bessent’s lawyers filled out paperwork properly, the bank has confirmed it was done properly, and this nonsensical article reaches the conclusion that this was all done properly,” Bessent’s lawyer Alex Spiro said in a statement.The Republican president, who appointed Bessent to the Treasury post, and members of his administration have accused Cook, an appointee of the Democratic former president Joe Biden, of committing mortgage fraud before taking office, a claim Cook denies.Congress included provisions in the 1913 law that created the Fed to shield the central bank from political interference. Under that law, Fed governors may be removed by a president only “for cause”, though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court. Trump has sought to remove her for cause, citing the alleged fraud.A US appeals court on Monday declined to allow Trump to fire her. The White House has said it will appeal the decision to the US supreme court. Trump’s justice department also has launched a criminal mortgage fraud inquiry into Cook, issuing grand jury subpoenas in Georgia and Michigan, Reuters previously reported.A loan estimate for an Atlanta home purchased by Cook showed that she had declared the property as a “vacation home”, according to a document reviewed by Reuters. The property tax authority in Ann Arbor, Michigan, also said Cook had not broken rules for tax breaks on a home there that had been declared her primary residence.Bloomberg in its report on Wednesday pointed to similar but not identical pledges made by an attorney on Bessent’s behalf on 20 September 2007, agreeing to make a Bedford Hills, New York, house his “principal residence” over the next year as well as another house in Provincetown, Massachusetts.“There are people who think that President Trump is putting undue pressure on the Fed. And there are people like President Trump and myself who think that if a Fed official committed mortgage fraud, that this should be examined, and that they shouldn’t be serving as one of the nation’s leading financial regulators,” Bessent told Fox Business Network in an interview on 27 August. More

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      Lisa Cook to remain at Federal Reserve while fighting Trump’s attempt to fire her, judge rules

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      A federal judge has ruled that Federal Reserve board member Lisa Cook can stay in her post while suing Donald Trump over his unprecedented bid to fire her.Cook is legally challenging the US president after he sought to remove her, citing unconfirmed allegations of mortgage fraud, amid an extraordinary campaign by his administration to strengthen its control over the US central bank.She asked US district judge Jia Cobb to impose a temporary restraining order against Trump’s attempt to “immediately” dismiss her, pending further litigation. The administration has argued that Trump is able to fire Fed governors “for cause” and appoint replacements.Trump has spent months attacking the Fed, where most policymakers – including Cook – have so far defied his calls for interest rate cuts. He has spoken of rapidly building “a majority” on the central bank’s board, calling into question the future of its longstanding independence from political oversight.Trump moved to fire Cook after one of his allies, Bill Pulte, whom he tapped to lead the US Federal Housing Finance Agency, alleged she had claimed two different properties as primary residences when obtaining mortgages in 2021.“How can this woman be in charge of interest rates if she is allegedly lying to help her own interest rates?” Pulte wrote on X. He referred the case to the Department of Justice for investigation.After Cook declined to resign, Trump tried to remove her from the Fed’s board. The justice department is now looking into the allegations of mortgage fraud.In a court filing, Cook’s attorneys insisted she “did not ever commit mortgage fraud” as they outlined their case.Multiple federal agencies were provided details of Cook’s mortgage arrangements when she was first nominated, by Joe Biden, to join the Fed’s board in 2022, according to her representatives. “The Government has long known about the alleged facial inconsistencies in Governor Cook’s financial documents,” the filing said.On one background check form, for example, Cook said that she had listed one property in Michigan as a primary residence and another in Georgia as a second home.On a separate questionnaire, she listed both homes as her “present” residence; the Michigan property as her “current permanent residence”; and a third property, in Massachusetts, as both a present residence, but also a second home and rental property, she said. More

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      Project 2025 and Donald Trump’s Dangerous Dismantling of the US Federal Government

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      Fair Observer Founder, CEO & Editor-in-Chief Atul Singh, or the Rajput, and retired CIA officer Glenn Carle, or the WASP, examine US President Donald Trump’s cuts to the US federal government. Their wide-ranging discussion blends sharp historical insight with ideological critique, seeking to make sense of today’s Volatile, Uncertain, Complex and Ambiguous (VUCA) world.

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      They emphasize that this topic has global resonance, since the world still depends on the stability and leadership of the United States. The discussion, therefore, becomes both an internal American debate and an international concern.

      Trump’s attack on federal agencies

      Atul and Glenn begin by cataloging specific Trump-era actions they view as evidence of a systematic weakening of the federal apparatus. These include the removal of officials such as Federal Reserve Governor Lisa Cook, Center for Disease Control and Prevention Director Susan Monarez and Internal Revenue Service Commissioner Billy Long. They argue that such moves, combined with a broader hollowing out of institutions like the Federal Reserve, the State Department, the CIA, US Agency for International Development and NASA, represent an intentional “gutting” of agencies crucial to governance and public welfare.

      Atul and Glenn insist that these institutions exist not only for technical governance but also for maintaining the credibility of the American democratic model. If the credibility of these institutions collapses, it erodes public trust and damages the US’s global standing.

      Norquist’s philosophy and Ronald Reagan’s agenda

      Glenn situates Trump’s efforts within a longer ideological arc. He traces them back to US President Ronald Reagan’s “revolution,” which reduced faith in government and elevated conservative economic philosophy. Reagan’s agenda, amplified by figures such as Americans for Tax Reform President Grover Norquist — who is famous for wanting to shrink government so small he could “drag it into the bathroom and drown it in the bathtub” — and bolstered by conservative think tanks, paved the way for what Glenn calls today’s “Trumpian revolution.”

      Atul adds that the Reagan years were not just an American turning point, but part of a broader global shift toward neoliberalism, deregulation and privatization. The ideological groundwork laid in that era, they contend, continues to shape political agendas today.

      Trump and Project 2025

      Central to the conversation is Project 2025, a Heritage Foundation initiative Atul and Glenn describe as a radical blueprint. Its goals include cutting the federal workforce by half and dramatically expanding presidential powers. They stress that these proposals would not only disrupt government efficiency and accountability but also tilt the balance of power sharply toward the executive branch.

      Atul and Glenn emphasize that the size of the workforce reflects the government’s ability to deliver services, regulate markets and provide stability in times of crisis. Reducing this by half would, in their view, leave the country dangerously exposed.

      Federal layoffs under Trump 2.0

      Atul and Glenn note that Trump’s current plans echo his first term, but with greater intensity. They state that proposals to eliminate 50% of the federal workforce are unprecedented in scope. They interpret these layoffs as more than cost-cutting; they are an ideological purge designed to weaken federal institutions and concentrate loyalty directly under presidential control. Such measures would ripple outward beyond Washington to ordinary citizens who depend on federal programs, grants and regulatory oversight for health, education and economic stability.

      Presidential control: a threat to US democracy?

      Glenn links Trump’s approach to the legal philosophy of Carl Schmitt, “[Adolf] Hitler’s legal theorist,” who defended the primacy of unchecked executive authority in Nazi Germany. Schmitt’s concept of the unitary executive resonates with Trump’s own political movement, Glenn argues, by undermining checks and balances and normalizing near-absolute presidential power. This strikes at the heart of democratic governance.

      Atul points out that the American system was designed around the separation of powers. If that foundation is eroded, the US risks losing what has long been its distinctive democratic safeguard.

      The Republican Party’s evolution

      The conversation also turns to the broader Republican Party. Atul and Glenn argue that decades of conservative activism, think tank influence and shifting party priorities have steered the Grand Old Party toward radical centralization of power. They suggest that what once seemed like outlandish ideas are now mainstream within the Republican platform, particularly under Trump’s leadership. This shift is both political and cultural, representing a redefinition of what conservatism means in the US.

      Fascism, strongmen and the future

      Atul and Glenn conclude with a sober warning: Left unchecked, the United States risks sliding from liberal democracy into what they call a “conservative autocracy.” They point to echoes of strongman politics and fascist ideology, stressing the long-term danger of normalizing authoritarian principles. At the same time, they note Trump’s diverse support base — including many immigrants who align with cultural conservatism and share a disdain for bureaucracy — as evidence that these dynamics are both complex and deeply embedded in American society.

      They highlight that this contradiction of immigrants supporting an anti-immigrant politician reveals how cultural and ideological affinities can often outweigh personal experience. The episode ends as a call to reflect on the fragility of democratic institutions and the vigilance required to protect them.

      [Lee Thompson-Kolar edited this piece.]

      The views expressed in this article/podcast are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in US Politics

      The ‘bizarre’ referral of the US housing finance agency chief to oust Lisa Cook

      by

      The head of the Federal Housing Finance Agency embraced a highly unusual process to accuse Lisa Cook, a Federal Reserve governor, of committing mortgage fraud, former officials and experts have said. One former high-ranking official called the director’s involvement in a criminal referral “bizarre”.William Pulte, a businessman and major GOP donor whom Donald Trump appointed to head the powerful housing agency earlier this year, has accused Cook of committing mortgage fraud by misrepresenting her homes as a primary residence, potentially securing more favorable mortgage rates. The justice department formally opened a criminal investigation into whether Cook committed fraud and has issued subpoenas related to the transaction. Cook’s lawyers have called the discrepancies a “clerical error” and she has denied any wrongdoing.Trump has used those accusations as the basis to try to fire Cook, who has strongly denied the allegations and is contesting her firing in court. Pulte has also made similar referrals against New York attorney general Letitia James and California senator Adam Schiff, both political rivals of Trump.Investigations into mortgage fraud are usually handled by the Federal Housing Finance Agency’s office of inspector general (OIG), an agency watchdog, staffed with lawyers and agents with an expertise in investigating crimes, including mortgage fraud. The OIG is then the office that typically makes a criminal referral.“It’s very bizarre for Pulte to be the one making a criminal referral himself and it’s not coming from the IG’s office,” said Janell Byrd-Chichester, a former chief of staff at FHFA. “If we thought there might be criminal activity, that would go to the IG for review and a determination and the IG would be making any referral, not the agency.”Three other former officials across the inspector general’s office and FHFA said Pulte’s involvement was unusual.After assuming his position earlier this year, Pulte started an FHFA hotline to report waste, fraud and abuse. The move seemed strange to some in the office of the inspector general, which already has its own hotline to report fraud, according to a person familiar with the matter.“It’s certainly unusual, if not unprecedented, for the director of FHFA to make a single request to the justice department that someone be investigated for alleged mortgage fraud,” said Guy Cecala, the executive chair of Inside Mortgage Finance, an information company and research firm that has covered the mortgage market for more than four decades. “Historically, we haven’t seen a lot of people prosecuted for mortgage fraud in terms of misrepresenting their occupancy on a house.”While the FHFA inspector general would take referrals from FHFA, their investigations were typically walled off from FHFA, former officials said. The separation helped protect the privacy of borrowers and their sensitive mortgage information. The inspector general’s office would typically only pursue cases that resulted in substantial losses to Fannie Mae and Freddie Mac, government-sponsored enterprises that are regulated by FHFA.The extent of the FHFA inspector general’s involvement in Cook’s mortgage is unclear. Also uncertain is whether Pulte requested that officials at Fannie Mae or Freddie Mac pull Cook’s loan documents – highly sensitive information – or whether the claims are based entirely on publicly available mortgage information. In Schiff’s case, the OIG appears to have at least requested documents about his home loans, according to the Los Angeles Times.“Your inquiry relates to public statements made by the Director of FHFA. I recommend that you reach out to FHFA’s media shop,” a spokesperson for the FHFA inspector general said in a statement. “FHFA OIG does not comment on the existence or non-existence of investigations conducted by this office.” FHFA did not return a request for comment.Pulte has refused to say why his agency started its inquiry into Cook. There is widespread belief that the decision was politically motivated because Trump wants to remove her from the Federal Reserve board in order to stack it with his appointees.Understanding the origins of Pulte’s inquiry is significant because misrepresenting occupancy on a mortgage application does not appear to be uncommon. Texas attorney general Ken Paxton, a Republican, and at least three members of Trump’s cabinet have listed multiple places as their primary residence, but have not faced the kind of scrutiny Cook has.“Issues with Cook’s loan file weren’t caught in some routine audit or the like. No one ever goes back and examines loan applications on performing loans for occupancy fraud; that would entail expenses for no benefit,” Adam Levitin, a law professor at Georgetown University, wrote in a post on the blog Credit Slips. “Instead, the only way anyone would have noticed a problem with Cook’s loan application is that Pulte, as head of FHFA, directed Fannie or Freddie to pull her application. That is unheard of.”Furthermore, Pulte had referred Cook for a criminal inquiry without presenting bona fide evidence of a crime.“If Cook broke her promise about property use (and that isn’t clear), all that shows is a breach of contract,” Levitin wrote in a separate blog post in August. “For it to be fraud, she would have to have never intended to perform the promise in the first place. Pulte has no evidence whatsoever about Cook’s intent at the time she took out the mortgage. He hasn’t even shown a breach of contract, much less common law fraud, not to speak of a federal criminal law violation.”Observers have said it was also unusual for a loan to attract scrutiny if it was being paid. “This case is unusual because I’m not aware of any actual loss that’s occurred. I’m assuming neither of these mortgages are in default. I’m assuming neither of the mortgages in question are underwater,” Cecala said.After the financial crisis, Fannie Mae and Freddie Mac began conducting random sampling on performing mortgages to see if there were issues that could put them at risk. But in cases where they found issues, it was rare that they would seek criminal punishment for the borrowers.“Normally in those cases – and again this is just precedent – Fannie and Freddie don’t get involved in the prosecution or even referring it to the justice department,” Cecala said. “They’ll just say, we see a problem with this mortgage and they just require the lender who made the loan to buy the loans back out of Fannie Mae and Freddie Mac securities.” More