Indeed, as Watters alluded, Trump sought Cook’s removal first and foremost because of her policy views, but since the law precludes doing so, he’s adopted an obvious pretext to end-run the Federal Reserve’s statutory independence.
The Federal Reserve functions as the U.S. central banking system, managing the country’s monetary policy with a dual mandate of curbing inflation and achieving full employment. To prevent political interference, by law the seven members of its Board of Governors are appointed to 14-year terms and can only be removed “for cause.”
But Trump disagrees with the Fed’s policy decisions — he wants the Fed to lower benchmark interest rates to boost the economy, which the governors have refused to do, citing rising prices. After his repeated denunciations failed to spur policy changes, the president began casting about for plausible-seeming rationales to remove its recalcitrant leaders.
He first targeted Powell, who he claimed had mismanaged renovations of the Federal Reserve’s headquarters. But he subsequently turned his attention to Cook with an assist from Federal Housing Finance Agency Director William Pulte, a “close Trump ally” who has weaponized his agency to target the president’s political opponents.
After Pulte accused Cook of mortgage fraud in an August 15 letter to Attorney General Pam Bondi and appeared in a series of Fox interviews, Trump called for her to step down. Then on Monday night, Trump announced that he had fired Cook, citing Pulte’s “criminal referral” (Cook says she will not step down and that “no cause exists under the law” to remove her).
It is so blindingly obvious what is going on here that even Watters understands: The administration’s top priority is punishing domestic enemies while rewarding political allies.
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