In recent weeks, former President Donald Trump has ramped up efforts to influence the monetary policy of the Federal Reserve, seeking lower interest rates.
Trump's Strategy for Rate Cuts
Trump and his team are actively working to build support within the Fed for reducing interest rates. Following Kugler's resignation, Trump appointed Miran to strengthen the group advocating for rate cuts. The focus now shifts to Fed member Lisa Cook, as Trump seeks to influence her stance. Currently, seven out of twelve votes from Fed members are essential for making a decision on rate cuts.
Unconventional Tactics
Trump has reportedly pressured Cook, backed by allegations related to mortgage fraud. Bill Pulte, associated with past operations against Powell, has asserted that Cook falsified banking documents for favorable loans, intensifying scrutiny on her position within the Fed.
Economic Consequences of the Pressure
The Federal Housing Finance Agency (FHFA) concluded its investigation into Cook, potentially prompting further inquiry by the Justice Department. Trump's tactics remain unique, using external pressure and legal threats to stir Fed policy. This puts the Fed members, including Chair Powell and Cook, under significant strain, with implications for their independence. Markets reacted to these events, with Bitcoin's value falling to $112,400, breaking key support levels.
The unfolding situation indicates Trump's determination to influence monetary policy using aggressive legal and political tactics. The pressure on Fed members like Cook raises critical questions about the future dynamics within one of the country's most pivotal financial institutions.
