<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/usa" rel="" target="_blank" title="US"><span>US</span></a><span> President </span><a href="https://www.9news.com.au/donald-trump" rel="" target="_blank" title="Donald Trump"><span>Donald Trump</span></a><span> said that he's firing Federal Reserve Governor Lisa Cook, an unprecedented move that would constitute a sharp escalation in his battle to exert greater control over what has long been considered an institution independent from day-to-day </span><a href="https://www.9news.com.au/politics" rel="" target="_blank" title="politics"><span>politics</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump said in a letter posted on his Truth Social platform that he is removing Cook effective immediately because of allegations that she committed mortgage fraud.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>LIVE:</span></strong><span> </span><a href="https://www.9news.com.au/national/porepunkah-victoria-police-shooting-live-updates-latest-news-headlines/7dcdf6e1-5c00-4554-8d22-cc74f2e1f007" target="_blank" title="Police officer injured, 'grave fears' for two others after shooting in Porepunkah"><strong><span>Police officer injured, 'grave fears' for two others after shooting in Porepunkah</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Pulte alleged that Cook had claimed two primary residences - in Ann Arbor, Michigan, and Atlanta - in 2021 to get better mortgage terms.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Mortgage rates are often higher on second homes or those purchased to rent.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump's move is likely to touch off an extensive legal battle that will probably go to the Supreme Court and could disrupt financial markets, potentially pushing interest rates higher.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/world/donald-trump-lisa-cook-federal-reserve-usa-united-states/3f133d4d-6259-42a1-9570-8e4a843ad3ef" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The independence of the Fed is considered critical to its ability to fight inflation because it enables it to take unpopular steps like raising interest rates.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>If bond investors start to lose faith that the Fed will be able to control inflation, they will demand higher rates to own bonds, pushing up borrowing costs for mortgages, car loans and business loans.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Legal scholars noted that the allegations are likely a pretext for the president to open up another seat on the seven-member board so he can appoint a loyalist to push for his long-stated goal of lower interest rates.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Fed governors vote on the central bank's interest rate decisions and on issues of financial regulation.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While they are appointed by the president and confirmed by the Senate, they are not like cabinet secretaries, who serve at the pleasure of the president.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>They serve 14-year terms that are staggered in an effort to insulate the Fed from political influence.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>No president has sought to fire a Fed governor before.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In recent decades, presidents of both parties have largely respected Fed independence, though Richard Nixon and Lyndon Johnson put heavy pressure on the Fed during their presidencies — mostly behind closed doors.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Still, that behind-the-scenes pressure to keep interest rates low, the same goal sought by Trump, has widely been blamed for touching off rampant inflation in the late 1960s and '70s.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/iran-orchestrated-at-least-two-antisemitic-attacks-in-australia-anthony-albanese-says/d0cede9a-6c94-4f68-b86d-29099be3f514" target="_blank" title="Iran orchestrated at least two antisemitic attacks on Australian soil, PM says"><strong><span>Iran orchestrated at least two antisemitic attacks on Australian soil, PM says</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The announcement came days after Cook said she wouldn’t leave despite Trump previously calling for her to resign.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Senate Democrats had expressed support for Cook, who has not been charged with wrongdoing.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>“The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve member banks.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The American people must have the full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve," Trump wrote in a letter addressed to Cook, a copy of which he posted online.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump argued that firing Cook was constitutional, even if doing so will raise questions about control of the Fed as an independent entity.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>“The executive power of the United States is vested to me as President and, as President, I have a solemn duty that the laws of the United States are faithfully enacted," the president wrote in the letter to Cook.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"I have determined that faithfully enacting the law requires your immediate removal from office.”</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Among the unresolved legal questions are if Cook could be allowed to remain in her seat while the case plays out.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>She may have to fight the legal battle herself, as the injured party, rather than the Fed.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/donald-trump-australia-google-meta-facebook-government/ea7bbf82-2eee-40f5-9ae5-60f124c12d59" rel="" target="" title="Australia put on notice by Donald Trump's latest tech tariff threat"><strong><span>Australia put on notice by Donald Trump's latest tech tariff threat</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In the meantime, Trump's announcement drew swift rebuke from advocates and former Fed officials who worry that Trump is trying to exert too much power and control over the nation’s central bank.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>“The President’s effort to fire a sitting Federal Reserve Governor is part of a concerted effort to transform the financial regulators from independent watchdogs into obedient lapdogs that do as they’re told. This could have real consequences for Americans feeling the squeeze from higher prices,” Rohit Chopra, former director of the Consumer Financial Protection Bureau, said in a statement.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It is the latest effort by the administration to take control over one of the few remaining independent agencies in Washington.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Forcing Cook off the Fed’s governing board would provide Trump an opportunity to appoint a loyalist.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump has said he would only appoint officials who would support cutting rates.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Powell signalled last week that the Fed may cut rates soon even as inflation risks remain moderate.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Meanwhile, Trump will be able to replace Powell in May 2026, when Powell’s term expires.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>However, 12 members of the Fed’s interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the chair might not guarantee that Fed policy will shift the way Trump wants.</span></div></div>