Representative Waters Criticizes Trump’s Attacks on the Fed Governor Cook
Commentary by Steven Lofchie
At a House Financial Services Committee roundtable, Ranking Member Maxine Waters asserted that President Trump’s attempt to remove Federal Reserve Governor Lisa Cook poses a direct threat to the Fed’s independence.
Representative Waters stated that President Trump has carried out a pattern of attacks on the Federal Reserve, beginning with public criticism of Chair Jerome Powell and now attempting to remove Governor Cook without adequate grounds or due process. She emphasized that inflation and other economic pressures stem from Trump’s trade policies and spending cuts, not from decisions made by the Fed.
Representative Waters observed that federal courts have thus far blocked the Administration’s efforts and upheld Governor Cook’s position. (See related coverage.) She cautioned that the legal battle is likely to reach the Supreme Court and warned that if Trump prevails, it will set a dangerous precedent, undermine the Fed’s independence, and put the financial security of working families at risk.
Commentary
The battle over Governor Cook is interesting from a whole variety of angles, to name a few:
1) Does the Constitution provide for the "independence" of a federal agency?
2) Can the Federal Reserve Board demonstrate that its independence has enabled it to control inflation? Didn't it fail at that goal during the BIden Administration? Has the Federal Reserve Board acted in a genuinely apolitical manner?
3) Is it really the case that serious allegations of misconduct before an individual becomes a Governor, even if they were not known to the Senate at the time of confirmation, are not "cause" for removal?
4) Relatedly, can an individual really possess a "property interest" in being a Governor of the Federal Reserve Board? Conversely, how can Congress maintain a say in membership in the Board of Governors if the President is free to fire Governors that he does not like?
5) If the Federal Reserve Board is independent because of its role in monetary policy, should its role be limited to monetary policy?
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