Fed independence, document exonerates (for now) Lisa Cook
Fed governor under Trump attack would correctly call one of the homes for which she would apply for a mortgage a 'second home'
2' min read
2' min read
That US President Donald Trump will sooner or later manage to get the majority of the Fed's board and a say in monetary policies on his side is a given. But for the moment Federal Reserve Governor Lisa Cook scores a point in her favour and for the protection of the institution chaired by Jerome Powell: a document seems to confirm her correctness in the case that sees her under indictment for mortgage fraud.
The document
.Lisa Cook in fact defined a flat she purchased in June 2021 as a 'holiday home' in a loan appraisal. This definition could belie the Trump administration's claims that she committed mortgage fraud. President Donald Trump sought to dismiss Cook 'for cause' based on allegations that Cook simultaneously claimed both the flat and another property as his primary residence. Trump is seeking to reshape the central bank's board after an unprecedented push to get the Fed to cut interest rates sharply. Documents obtained by the Associated Press also showed that even on a second official form submitted by Cook in the financing process, the governor allegedly described the property as a 'second home'.
The accusation of fraud
.It sounds like a woolly question but it is not: it could avoid Cook's dismissal and guarantee the current Fed board the line of independence in choosing the cost of money.
In essence, Federal Reserve Governor Lisa Cook defined a flat she bought in June 2021 as a 'holiday home' in the documents required to obtain bank financing; a definition that could disprove the Trump administration's claims that she committed mortgage fraud by speculating on the favourable rate that is granted on a primary residence in the US. Cook has already sued the Trump administration to block his dismissal. On Tuesday, Cook obtained an injunction allowing her to remain a Fed governor. It will be seen how this will play out. The administration has appealed the ruling and asked for emergency action by Monday, just before the Fed meeting that will decide whether to cut the benchmark interest rate. Most economists predict that the rate will be cut by a quarter point.
