Why the Chance of the Fed Cutting Interest Rates Increased Tonight

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Federal Reserve Chair ‘Too Late’ Jerome Powell has been a thorn in President Trump’s economic agenda. He doesn’t want to cut the rates, despite ample signs that inflation has stabilized. The tariffs have not wrecked the economy, but he remains defiant, creating immense tensions between the Fed and the White House. Powell did signal that he could cut rates in September. Now, the chance of that has increased with the firing of Federal Reserve Governor Lisa Cook, who’s been criminally referred on suspicion of mortgage fraud (via NBC News):

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President Donald Trump is removing Federal Reserve Governor Lisa Cook effective immediately, according to a letter he posted to Truth Social on Monday night.

In the letter, Trump writes: "Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately."

Trump cites a "criminal referral" from Federal Housing Authority director William Pulte from August 15. In that referral, Pulte accused Cook of mortgage fraud. 

The Federal Reserve did not immediately respond to a request for comment. 

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On her part, Cook has vowed not to be bullied out of her seat. 

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