Donald Trump’s decision to fire Federal Reserve governor Lisa Cook is a pivotal moment. It signals the US president’s switch from unpleasant name-calling of the Fed to an all-out assault on central bank independence. There is every reason to fear for the survival of a key pillar of US and global economic stability.
It is important to see the forest for the trees here. Do not get distracted by the detailed questions over Cook’s mortgage applications, about which we know only a sketchy and one-sided story. What we are seeing is a cold and calculated display of intent to ensure the Fed bends to the president’s view of how to run the US economy.
The first question is why one person on the Fed’s seven-member board is so important when there are 12 voting members on the interest rate-setting Federal Open Market Committee.