President Donald Trump’s attempt to fire Federal Reserve Board Governor Lisa Cook is, as some see it, part of a bigger push to force the central bank to lower interest rates. But if that’s the case, Cook is an awfully curious target.
Of the 12 officials who sit on the rate-setting Federal Open Market Committee, she appears to be among the most likely to vote in favor of a rate cut when they meet next month.
Trump said this week that he was ousting Cook “for cause” after one of the president’s yes-men claimed that she had committed mortgage fraud. But she has not been charged with any crime or wrongdoing. As Michael Hiltzik of the Los Angeles Times has noted, “The accusations are so meager that whether the firing will stand is an open question.” Cook, who has vowed to stay at the Fed, is fighting back and has sued Trump.
For months, Trump has been hectoring the Fed — and, in particular, Chairman Jerome Powell — to slash interest rates, while angling to fill the central bank’s board with allies who will do his bidding.
But why go after Cook of all people?
Other policymakers are more widely viewed as inflation “hawks,” predisposed to keep interest rates on the higher end so as to temper economic growth and prevent prices from potentially spiraling out of control. Cook, for her part, is seen by “many outside observers” as “a relative ‘dove,’” the New York Times has pointed out.
Perhaps, then, Trump’s attack on Cook is simply part of his larger attack on the Fed’s independence — a reflection of his unrestrained authoritarian impulses.
We also can’t ignore the other reality: that the president seems to have a problem with Black people in positions of power. Indeed, Trump’s attempt to remove the first Black woman to serve on the Fed’s board in its 111-year history can’t be divorced from the broader pattern of those he has chosen to denigrate.
For all of that, though, he and Cook find themselves on a similar page when it comes to trying to make sure that interest rates don’t hold back growth too much — albeit for very different reasons.
The president’s apparent aim is to boost an economy that he has undermined with a torrent of tariffs and myriad other missteps, as well as to lessen the cost of servicing the government debt he’s running up.
Cook, meanwhile, is well versed in the long struggle, often led by communities of color, to compel the central bank to stop giving inordinate attention to one side of its dual mandate — warding off inflation — and focus more on the other side: stimulating job creation.
“Employment is the key to a healthy economy,” Cook said in a 2023 speech, asserting that “maximum employment” can pull in from the sidelines those who’ve dropped out of the labor force, promote business investment and stimulate “more ideas, including more diverse ideas, more invention and more innovation.”
A low jobless rate also does something else: It helps lift people’s pay as employers are forced to compete harder for workers. This is why, some suggest, corporate America has always been resistant to the notion of “full employment” — the point at which everyone who wants a job can find one.
