Overview

• Nearly 600 economists signed an open letter defending Governor Lisa Cook and warning that her removal would erode the Federal Reserve’s independence and raise borrowing costs by injecting political risk into rates.
• ECB President Christine Lagarde cautioned that efforts to oust Cook or sideline Fed Chair Jerome Powell pose a very serious danger to the U.S. and global economies, while noting legal barriers to taking control of the Fed.
• Treasury Secretary Scott Bessent said the Fed should remain independent but defended the president’s authority to remove Cook, arguing markets have not shown distress from the dispute.
• Cook has sued to block the firing and seeks an emergency injunction; a judge has not yet ruled after an expedited hearing set the case on a fast track.
• The White House cites an FHFA referral alleging 2021 mortgage-related misstatements before Cook joined the Fed, and the DOJ has opened an inquiry with no charges filed, as Trump continues pressing for steep rate cuts.