President Donald Trump's bid to remove a Federal Reserve governor, Lisa Cook, is both "unlawful and dangerous," according to former Treasury Secretary Janet Yellen, calling it a direct attack on the independence of the central bank.
"President Donald Trump's claim that he has 'fired' Federal Reserve governor Lisa Cook 'for cause' is not only unlawful; it is profoundly dangerous," Yellen wrote in a Financial Times opinion piece. "It represents a direct attempt to politicize the Fed, intimidate its leadership and bend monetary policy to the president's will."
Cook, appointed in 2022 and the first Black woman to serve on the Fed Board, has faced allegations from Trump and Federal Housing Finance Agency Director Bill Pulte for mortgage fraud. She has denied wrongdoing and has vowed to fight her removal in court.
The Federal Reserve governors serve 14-year terms and may only be removed "for cause" tied to documented misconduct to avoid political retribution, according to Yellen.
"Accusations are not cause," Yellen argued. "For Trump to invoke cause here is a fiction; it is a pretext to justify an autocratic power grab.
"This is not about one Federal Reserve governor," Yellen continued. "It is about 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."
Yellen fears the Federal Reserve Board will become a "puppet stage for presidential whims and priorities."
She was hired by former President Barack Obama as the first woman Federal Reserve Board and former President Joe Biden as the first woman Treasury Secretary on those administration's presidential whims and priorities.
"If markets believe the Fed's hand is guided by political orders, every interest rate decision will lose credibility," Yellen wrote. "Inflation expectations could become unmoored. The dollar's standing as the world's reserve currency would be imperiled."
Yellen urged Congress, the courts, and the financial community to reject Trump's move outright.
"Trump's attempted sacking of Cook should be met with outrage, not with shrugs," she concluded. "Congress must defend the Fed's independence. The courts must strike down this unlawful power play. And the financial community must raise its voice against a direct assault on the credibility of the dollar itself."
Trump is convinced the Fed is costing Americans billions by not reducing interest rates in a timely fashion, calling sitting Federal Reserve Chair Jerome Powell as "too late."
Eric Mack ✉
Eric Mack has been a writer and editor at Newsmax since 2016. He is a 1998 Syracuse University journalism graduate and a New York Press Association award-winning writer.
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