Supreme Court Upholds Fed's Independence, Trump Seeks Powell Successor
The Supreme Court has upheld the Federal Reserve's (Fed) independence, dismissing President Trump's attempt to remove Chair Lisa Cook. Meanwhile, Trump is actively seeking a replacement for outgoing Chair Jerome Powell, with several candidates in the mix.
Trump tried to dismiss Cook, citing unproven mortgage fraud allegations. Cook, however, deemed these allegations 'flimsy' and argued that Trump did not provide adequate time for response. The Supreme Court temporarily sided with Cook, allowing her to remain on the board until January, when a final ruling is expected.
Trump's aim is to secure a majority of supporters on the seven-person board to influence interest rates and Fed policies. He has already appointed Stephen Miran, who has dissented from the central bank's decisions. The next vote to reappoint regional Fed bank presidents is due in late February, adding pressure to Trump's efforts.
As for Powell's successor, Trump has not officially announced a candidate. However, names like Kevin Hassett, Kevin Warsh, Christopher Waller, and James Bullard have been mentioned as potential replacements.
The Supreme Court's decision preserves the Fed's independence for now. If it sides with Trump, future presidents may have an easier path to remove Fed officials. If it sides with Cook, the threat to the Fed's independence will be lessened but not eliminated. Trump's search for Powell's successor continues, with several candidates in the running.
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