Trump's Controversial Dismissal of Fed Governor Sparks Debate

In a surprising move, President Trump dismissed Federal Reserve Governor Lisa Cook over allegations of mortgage fraud. This act, seen as a bid for control over the Fed, has sparked debates about the importance of Fed independence — critical for managing the U.S. economy and inflation effectively.

President Donald Trump has intensified his confrontation with the Federal Reserve by firing Governor Lisa Cook, a move that has raised significant concerns over the institution's independence.

Trump alleged Cook's involvement in mortgage fraud, a claim originating from Bill Pulte, a figure linked to the Federal Housing Administration. Despite the accusation, Cook had initially stated her intent to remain in her position.

The potential erosion of the Fed's independence, with Trump's tendency to assert control, alarms both economists and investors. The stability and predictability of financial markets heavily rely on a detached central bank, free of political influence.

(With inputs from agencies.)