According to Bloomberg News, a top official instructed Fed Reserve Chairman Jerome Powell to step down and advised him to do so, according to the report from the US Department of Justice.
According to a letter from a Department of Justice (DOJ) official who has conducted similar investigations into New York Attorney General Letitia James and Senator Adam Schiff of California, Cook’s case “requires further investigation,” Bloomberg reported on Thursday.
According to Bloomberg, Martin wrote, “At this time, I urge you to remove Ms. Cook from your Board.” “Do it now before it’s too late!” No American, after all, would agree that she should serve this time with a cloud over her.
A comment request was not immediately addressed by the DOJ.
A Fed representative referred to Cook’s statement on Wednesday, in which she claimed she had no intention of being “bullied” into resigning based on allegations made by a member of his administration about mortgages she holds in Michigan and Georgia.
A Fed chair has no authority under the Federal Reserve Act to appoint a new board of governors member.
Cook, the first Black woman to hold office in the Federal Reserve, is in the runoff for a 14-year term that began in 2023 with her second Senate confirmation.
The administration’s decision to remove Cook coincides with the launch of a campaign against diversity, equity, and inclusion (DEI), which furthers Trump’s ongoing efforts to control the US central bank and slash interest rates.
Fed under pressure
The Kansas City Fed’s annual Jackson Hole symposium, which will feature Powell giving a keynote speech on Friday, will open the organization’s annual meeting in Grand Teton National Park, where central bankers from around the world will discuss the state of the economy and, in the hope that, where rates will go, was held on Thursday.
At the event, Cleveland Fed President Beth Hammack stated to Yahoo Finance, “I just want to say that I know her to be an outstanding economist and person of high integrity.”
William Pulte, director of the US Federal Housing Finance Agency, claimed the allegations against Cook were part of his agency’s regular investigations into mortgage fraud and weren’t a “witch-hunt.” Pulte also referred the allegations against Cook to the Department of Justice this week.
According to Pulte, “frauding people is nothing new.” He claimed that “I believe she committed mortgage fraud” and that a special exemption for the powerful shouldn’t be granted because public records clearly ascribe fraud. He claimed that it is “self-evident” that the fraud exists.
As a member of the Federal Reserve, Cook has yet to respond directly to Pulte’s claim, saying only in his statement on Wednesday: “I do intend to take any questions about my financial history seriously. I am gathering the necessary information to respond to any legitimate questions and provide the facts.”
Due to concerns that Trump’s tariffs could reinvigorate inflation that is still below the Fed’s 2 percent target, the Fed has kept borrowing costs steady all year in the 4.25 to 4.5% range. Recent weaker labor market data, such as a report that showed job growth rates of a paltry 35, 000 between May and July, have raised concerns among Fed policymakers that borrowing costs may be a little too high and that financial markets are priced for the likelihood of a quarter-point cut at the Fed’s September meeting.
That would fall far short of the various Trump-required percentage points.
When Powell’s term expires in May, Trump has the power to appoint a new chair. Nearly a dozen candidates have endorsed the central bank’s proposal for significant rate cuts and changes, including US Treasury Secretary Scott Bessent, who is in charge of the search. Fed chairs typically resign when their positions of authority expire, but there is speculation that Powell will continue until 2028, denying Trump the opportunity to install more loyalists to bolster his position.
Trump has nominated Council of Economic Advisers Chairman Stephen Miran to lead the Fed in Adriana Kugler’s surprise resignation this month. Miran is a Fed critic and vocal supporter of Trump’s tariffs and other policies.
Source: Aljazeera
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