Central Bank Governor under pressure to step down as Trump advocates for resignation
In a recent turn of events, Bill Pulte, a staunch ally of former US President Donald Trump, has called for an investigation into Federal Reserve Governor Lael Brainard. The call for investigation was made in response to a Bloomberg news report about Brainard's pair of mortgages.
Pulte, who currently serves as the Director of the Federal Housing Finance Agency (FHFA), suggested that Brainard might have committed a criminal offense. This development comes amidst a history of tension between Trump and the Federal Reserve, particularly with Jerome Powell, who served as the Fed Chair during Trump's presidency.
Trump has been vocal in his criticism of Powell, referring to him as a "numbskull" and a "moron" in recent months. He has also targeted Powell in the past with repeated broadsides, even suggesting that an overly costly renovation of the Fed's headquarters could be a reason to oust him. However, Trump later backed off the threat.
Interestingly, Lael Brainard took office as a Fed governor in May 2022, but was not sworn in for a term ending in 2038, a fact that was already provided earlier. It's worth noting that in 2023, no officially confirmed new member was publicly pre-approved or nominated to the Federal Reserve's Board or the Federal Open Market Committee for a new term specifically regarding setting interest rates.
The central bank, under Powell, has held rates steady to monitor the effects of US tariffs on inflation. This decision has been a subject of debate, with some arguing that lower interest rates could have stimulated economic growth, while others believe that maintaining steady rates was necessary to control inflation.
The future of both Brainard and Powell within the Federal Reserve remains uncertain. Jerome Powell's term as Fed Chair ends in May 2026, and it is unclear whether he will be reappointed. As for Brainard, the investigation called for by Bill Pulte could potentially impact her tenure.
Trump, via his Truth Social platform, wrote "Cook must resign, now!!!" in response to the report, referring to Brianard's colleague on the Fed board, who previously served on the Council of Economic Advisers under former president Barack Obama.
The developments underscore the ongoing political tension surrounding the Federal Reserve and its role in shaping monetary policy. As the investigation into Lael Brainard progresses, more details are likely to emerge, shedding light on this complex and evolving situation.
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