Trump Targets Fed Governor in Latest Blow to Central Bank Independence
US President Donald Trump has reignited the controversy surrounding the Federal Reserve's independence by targeting Fed Governor Lisa Cook over unproven mortgage fraud allegations.
The move suggests that the administration is anxious about a potential interest rate hike as soon as next month, and that they may be unable to stop it even if their chair, Kevin Warsh, wants to.
Warsh has been trying to keep the Fed out of politics for years, but Trump's renewed effort to remove Cook could embolden her to side with the hawks if he fails. Alternatively, it could provide a scapegoat for any rate hike before the November midterm elections.
Futures markets see about a 75% chance of a quarter-point rate increase by then, driven by nearly six years of above-target inflation and an energy shock related to Iran.