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Former Federal Reserve Chair and Treasury Secretary Janet Yellen slammed President Trump on Wednesday for moving to fire Fed board of governors member Lisa Cook, calling his actions “unlawful” and “dangerous.”
“US President Donald Trump’s claim that he has ‘fired’ Federal Reserve governor Lisa Cook ‘for cause’ is not only unlawful. It is profoundly dangerous,” she wrote in an opinion piece in the Financial Times.
On Monday evening, Trump posted a letter to his social media account that said he was removing Cook from her position as a board member related to allegations of mortgage fraud first brought forward by Federal Housing Finance Agency Director William Pulte.
Cook has made it clear she is not stepping down from her position but will challenge the order in court and abide by the court’s ruling.
“Lisa Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System. As always, the Federal Reserve will abide by any court decision,” a Fed spokesperson said in a statement.
Yellen defended Cook in her article, saying she has done her job “with integrity.”
She also said Trump’s attempt to fire her was motivated by “intimidation.”
“By targeting Cook, Trump is sending a chilling message to every member of the Federal Reserve board and to the regional reserve bank presidents who take part in the Federal Open Market Committee: express disagreement with the president’s views and you are next,” she wrote.
Yellen also said that Trump’s move against Cook undermines the independence of the Fed, presents long-term inflation risks and lowers the value of the dollar.
She cited instances of political capture of the monetary authority in different countries, including Germany, Hungary, Argentina and Turkey.
“The names change, but the story is the same,” she wrote.
Pulte has made allegations of mortgage fraud against two other political enemies of the president, Democratic Sen. Adam Schiff (Calif.) and New York state Attorney General Letitia James.
James has brought multiple lawsuits against the president and won a nine-figure judgment against him for making false statements on financial disclosures.
Schiff played an instrumental role on the Jan. 6 congressional committee that investigated the riot at the Capitol following Trump’s loss in the 2020 election.
Trump has been pressuring Fed chair Jerome Powell to lower interest rates since the beginning of his term. He has cited the ballooning national deficit, as well as lower interest rates in other countries, as reasons that the Fed should lower rates.
Trump’s invocation of the national debt, which Republicans just increased by $3.4 trillion through the next decade through their new tax law, has raised concerns about fiscal dominance, which is when monetary policy is used to manage deficit levels in addition to inflation and unemployment.
Trump has called for the Fed to lower rates on the basis that it would save the government billions of dollars in the form of lower debt service costs.
Updated at 12:42 p.m. EDT
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