Instant Reaction: Trump Moves to Fire Fed's Lisa Cook

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1:22Learn more at bfa.com slash earn100. Terms and conditions apply. Bank of America and a member FDIC. Bloomberg Audio Studios. Podcasts. Radio. News. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3 ,000 journalists and analysts around the world. I'm Doug Krizner and we do have breaking news regarding the Federal Reserve. Tonight, President Trump removed Governor Lisa Cook. Cook. This is effective immediately. You may recall last Friday, Trump said he would fire Cook if she did not resign over accusations of alleged mortgage fraud. For a closer look now, I'm joined by Bloomberg's Anda Curran.

2:06He is a global economy reporter joining us from Washington, D.C. And it's always a pleasure. Directionally, if you look at the developments over the last week, this move seems to have been entirely predictable, does it not? Well, it's fast moving, Doug, no doubt about it. And we're into something of unprecedented territory here because we now have a president removing a Fed governor for cause, not something many are familiar with. So at the very least, there's probably going to be some legal debate over this, whether or not the president has the powers, whether or not the grounds are there for that.

2:42And of course, we have to await Ms. Cook's response. She said she wouldn't be bullied out of her position and has said she would come back with an explainer about the allegations of mortgage fraud in the first place. So there's a whole legal side of this that probably needs to play out. But on face value, the president appears to have removed a governor at a very critical juncture for Fed policy at a time when key appointments are coming up for vacancy, at a time when the president is very critical of the Fed for not bringing down interest rates. So certainly it would suggest that if this vacancy does come through, It's another, it's an opportunity for the president to put someone in there who shares his view on the economy.

3:21So last week, we know that Bill Pulte, he is the head of the Federal Housing Finance Agency, referred this case to the Department of Justice for some type of investigation. Do we know whether that has taken place so far? We don't have much detail on that, but clearly it has been fast moving since it emerged only last week, maybe mid-last week to where we are now. Now, it's a pretty quick-moving exercise. But by all accounts, the president seems to have made his own decision on this, Doug. It's clearly going to come as a surprise, I think, to a lot of observers and analysts that it has reached, the point that it has so quickly.

3:59And now that raises a question about where next. And as I was saying earlier, on the one hand, one would assume there's still a legal story in this to play out. And then on the other side, you have to ask, well, what does it mean for policy? Will this vacancy come through? And therefore, what does it mean for where interest rates are headed near term? So it's quite a significant moment for the Fed, both legally and in terms of its independence standing from the White House, and of course on the policy front too. Is there risk, I mean, at least from the point of view of the markets, that we're going to see much less independence on the part of the Fed?

4:33Well, look, there will be a perception about this. Much will depend on what comes out of the legal side of this, whether or not these allegations stand up in the first place, for example. But there certainly will be perception around it that it's more political pressure on the Fed for sure. Thank you so much. Bloomberg's Andy Kern, global economy reporter joining from Washington, D.C., helping us understand a little bit more about the breaking news tonight regarding the Fed. President Trump removing Governor Lisa Cook effective immediately. Last Friday, he said that he would fire Cook if she did not resign over accusations about alleged mortgage fraud.

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