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The president wants to get rid of them - the court says no
Donald Trump has a new opponent: Lisa Cook, member of the Board of Governors of the US Federal Reserve. The ex-president wants to throw her out, allegedly because of false information in an old mortgage contract. But the Fed governor is fighting back - and has now been proven right. A judge has ruled that Trump cannot fire Cook for the time being.
What sounds like an isolated incident is actually a power struggle over US monetary policy. For months, Trump has been calling for interest rate cuts - which the Fed has refused to deliver. By attempting to get unwelcome members out of the way, he apparently wants to gain more control over the Fed's decisions. But the judiciary is not playing along.
"Valid reason" - and Trump obviously doesn't have one
The legal snag in Trump's plan: members of the Federal Reserve Board of Governors may not be dismissed just like that. Federal judge Jia Cobb, herself appointed by Joe Biden, made it clear: a president needs "good cause" to remove someone from the Fed board. And this reason must relate to behavior during the term of office - not to private matters from before.
Cook not only denies the allegations, she also argues that the mortgage story took place years before she took office - and that she herself knew nothing of a mistake at the time. The judge takes a similar view. More importantly, she emphasizes that the public interest in an independent central bank takes precedence over a president's desire to impose his own people.
It's not just about Lisa Cook - it's about the Fed itself
What is happening here is more than a political dispute. It is about the independence of the US central bank - an institution that is important worldwide. Because if presidents can intervene in the board at will, the entire stability of monetary policy is suddenly at stake.
The case could soon end up before the Supreme Court. This is because it is still completely unclear how far the President is allowed to intervene in independent federal agencies such as the Fed. Although the Supreme Court has recently tended to rule in favor of the president, it has not yet taken a clear position on the Fed. Interesting: An earlier ruling suggested that Fed members might be better protected than other officials.
In any case, Lisa Cook will remain in office for the time being - her term of office runs until 2038 - and the next interest rate meeting is already just around the corner: on September 16 and 17. The timing could hardly be more explosive.
It's not that simple - not even for Trump
A president who wants to fire central bankers because they don't suit him politically? Sounds like a banana republic, not a world power. It's good that there are judges who put a stop to this. It would be even better if presidents stopped treating independent institutions like their PR departments.
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