Federal Reserve Representative Lisa Cook Will Remain in Her Position

[Redator]

Yesterday, reports emerged that a judge blocked President Donald Trump from removing Federal Reserve Chair Lisa Cook, allowing her to remain in office while she defends against the president's attempts to dismiss her over allegations of mortgage fraud.

This court decision marked an important milestone in the fight to protect the Fed's independence and its ability to make decisions without political interference. Trump's attempts to oust Lisa Cook sparked serious concerns in financial circles and among economists, who warned of potential negative consequences for the U.S. economy. Removing the Fed Chair for political reasons could undermine confidence in the central bank and lead to instability in financial markets.

The mortgage fraud allegations against Lisa Cook drew significant public attention and fueled political debate. However, after reviewing the evidence, the court concluded there were no sufficient grounds for her dismissal. The ruling prohibiting Cook's removal underscores the importance of upholding the rule of law and protecting officials from unfounded accusations.

U.S. District Judge Jia Cobb in Washington granted Cook's request to continue in her role. This decision means that Cook will likely be able to take part in the much-anticipated Fed policy meeting on September 16–17 and cast her vote in favor of lowering interest rates.

The judge found that the alleged mortgage misconduct was likely not grounds for dismissal under the Federal Reserve Act, and that the manner in which the president sought her removal likely violated her constitutional right to due process.

"The best interpretation of the 'for cause' provision is that the grounds for removing a Board Governor are limited to issues relating to the governor's conduct in carrying out official duties and whether those duties are being performed faithfully and effectively," the judge wrote.

Cook's lawyer, Abbe Lowell, said in a statement that Judge Cobb's decision recognizes and affirms the Fed's independence from political pressure. "If the president were allowed to unlawfully remove Governor Cook based on baseless and vague allegations, it would endanger the stability of our financial system and undermine the rule of law," Lowell said.

A Fed spokesperson declined to comment. The institution did not take sides in the court proceedings and stated it would respect the court's decision. The Department of Justice said it does not comment on ongoing or future litigation, including matters that may involve investigations.

The judge's ruling had no noticeable impact on the currency market, though the stock market reacted positively, continuing its sharp rise toward new all-time highs.

Technical outlook for EUR/USD: Buyers must focus on breaking through 1.1730. Only this would open the way to test 1.1760. From there, the pair could reach 1.1813, though doing so without support from large players will be challenging. The furthest target is the 1.1866 high. If the instrument falls, I expect serious buying interest only around 1.1690. If there are no buyers there, it would be preferable to wait for a retest of 1.1665 or consider long positions from 1.1630.

Technical outlook for GBP/USD: Buyers of the pound need to break through the nearest resistance at 1.3550. Only this would allow the pair to target 1.3590, above which further progress will be difficult. The furthest target lies around 1.3615. In case of a decline, bears will attempt to seize control at 1.3485. If successful, a breakout of this range would deal a serious blow to bulls and push GBP/USD down to the 1.3450 low, with the prospect of extending toward 1.3415.

The material has been provided by InstaForex Company - www.instaforex.com