Trump 'fires' Lisa Cook, escalating his war on the Federal Reserve

There is little precedent: No Fed governor has been dismissed for cause before.

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Mr Donald Trump has not been shy: He wants interest rates down, fast. For months, the US President has berated the Federal Reserve for dithering and cutting rates too slowly. In July, he flirted with firing Mr Jerome Powell, the Fed's chair, but backed off.

Another angle of attack opened up when Mr Bill Pulte, the head of the Federal Housing Finance Agency, claimed that Dr Lisa Cook, a governor on the central bank's board, had lied on her mortgage applications.

This time, the President has pounced. In a letter on Aug 25 posted to Truth Social, his social media platform, he announced that he was sacking Dr Cook "effective immediately".

She, in turn, issued a statement saying Mr Trump has no authority to fire her and refused to resign. The legality of the President's move is highly uncertain.

A Supreme Court judgment in May all but confirmed that Fed governors can only be sacked "for cause", and Dr Cook has not been indicted, let alone convicted, of any crime.

The allegations, which the Department of Justice is investigating, relate to paperwork submitted before Dr Cook took her post. There is little precedent: No Fed governor has been fired for cause before.