Stock market weathers Fed governor’s attempted firing well
Tuesday’s stock market remained little changed from Monday, despite President Donald Trump’s attempted termination of Federal Reserve Governor Lisa Cook on Monday evening.
The major U.S. stock indexes experienced minor fluctuations for most of the day, with the S&P 500 climbing steadily in the afternoon to finish 0.41% above Monday’s close at 6,465.94. The Nasdaq gained 94.94 points, or 0.44%, to close at 21,544.27. After a shakier start, the Dow Jones Industrial also swung upward toward the end of day, finishing 0.3%, or 135.60 points higher than Monday.
There was speculation over how the market might respond to Trump’s threat, as stocks have previously wavered when the president has threatened to fire Fed Chair Jerome Powell.
Trump posted a termination letter to Cook on his Truth Social account late Monday evening, just days after Director of the Federal Housing Finance Agency Bill Pulte claimed she had committed mortgage fraud. Cook owns properties in both Georgia and Michigan but had separately indicated both as her primary residences on different mortgage agreements, according to Pulte.
“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” the president’s letter reads. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
Cook, appointed by former President Joe Biden in 2022 for a 14-year term, shot back a few hours later through her lawyer and insisted she wouldn’t be resigning.
“I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,” Cook said.
If Trump is successful, Cook’s termination will be the first of a Federal Reserve governor by a president. The Fed is accountable to Congress and is to operate independently of political influence. Trump contended in his letter that he has the authority to fire Cook through the Federal Reserve Act of 1913, which states that a president can remove someone in her position “for cause.” He has claimed that the allegations of mortgage fraud are sufficient cause.
Cook’s attorney has indicated a lawsuit is coming.
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