Last month, Trump and his team intensified their efforts against Powell, aiming to transform Powell’s challenges into a corruption file. Speculations about Powell resigning, allegedly announced by the FHFA president, were part of the unfolding events. Now, Trump has initiated a second operation.
Trump Targets Interest Rate Reduction
Trump recently indicated his intention to permit legal action against Powell and now focuses on Fed member Cook. Following Kugler’s early resignation, Trump appointed Miran to the Fed, acquiring three members firmly supporting rate cuts. Two additional members argued that if unusual inflation fluctuations do not occur, rates should be reduced due to employment declines.
There are twelve Fed members, and seven votes are required for a rate cut decision. By targeting Cook, Trump aims to increase the pro-cut members to six. The question arises: how does he plan to achieve this?
Trump has requested Lisa Cook’s resignation, citing unverified allegations of her involvement in mortgage fraud. Bill Pulte, familiar from the Powell operation, claimed on social media that Cook was investigated and found to have forged banking documents to secure favorable loan conditions.
The Fed Operation
The FHFA investigation concerning Cook has concluded, paving the way for a criminal inquiry by the Justice Department. Trump, known for his unconventional methods, pressures the Fed members to initiate rate cuts, suggesting severe consequences otherwise. Amidst corruption allegations against Powell and mortgage fraud investigations against Cook, the pressure mounts.
These operations, blatantly damaging Fed’s independence, proceed without regard for market concerns. The Fed Chair and members are coerced, through legal intimidation, into compliance with Trump’s demands due to fear of legal entanglement.
Cook has consistently aligned with Powell in votes and statements, with years remaining in her service term.
Due to previously discussed reasons, BTC has weakened significantly, now reaching a new low at $112,400 and breaking the long-held $112,500 support level.
