Part 7/11:
The independence of the Fed has long been a cornerstone of global confidence in U.S. financial markets. An independent central bank ensures that monetary policy decisions are made based on economic data rather than political expediency. However, Trump's attempt to oust Lisa Cook signals a potential shift toward politicization, which could undermine this confidence.
Federal Reserve officials, including Cook, have publicly reaffirmed their commitment to independence. Cook emphasized that Trump's attempt to dismiss her was legally unfounded and she refused to resign. Such episodes threaten to distort the core principles of central bank autonomy, potentially leading to a cycle where monetary policy is increasingly driven by political considerations rather than economic realities.