U.S. stock futures are lower after President Donald Trump fired Federal Reserve Governor Lisa Cook, saying she submitted fraudulent mortgage applications.
“I have determined that there is sufficient cause to remove you from your position,” Trump wrote in a letter to Cook posted on social media.
Cook responded by saying Trump has no authority to fire her and said she wouldn’t resign.
AT 6:15 a.m ET, futures tied to the blue-chip Dow fell -0.14%, while broad S&P 500 futures slipped -0.08% and tech-heavy Nasdaq futures lost -0.06%.
The firing is Trump’s latest attack on a Fed member. For months, he has on-and-off again suggested firing Fed Chair Jerome Powell or getting him to resign.
Since the Fed’s founding in 1913, no member of the Fed’s seven-person board of governors has ever been fired by the president until now. The legality of Trump’s move will be up for debate and may end up in court if Cook challenges the firing.
A Trump Fed?
“If the president were successful, the outcome would be momentous,” said Michael Feroli, chief U.S. economist at JP Morgan.
Cook’s removal would open another spot on the Fed Board for Trump to fill the way he wants and give his appointees a majority on the Fed board. Trump recently nominated Chair of the Council of Economic Adviser, Stephen Miran to fill a seat vacated by President Joe Biden appointee Adriana Kugler’s resignation. Fed Goverors Christopher Waller and Michelle Bowman are Trump appointees.
Powell’s term also expires in May, and Trump has already begun to float names of candidates.
“Perhaps the more relevant outcome of a successful removal of Cook is that other governors could potentially be exposed to removal as well,”Feroli said. “This would add to upside inflation risks.”
Company news
Interactive Brokers will join the S&P 500 index, beginning before the market opens on Aug. 28.
Cryptocurrency
French chipmaker Sequans is the latest company aiming to build a corporate Bitcoin treasury. It said it filed for a $200 million at-the-market equity offering to pay for its longer-term aim to accumulate100,000 Bitcoin by 2030.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
This article originally appeared on USA TODAY: US stock futures lower after Trump fires Fed Governor Lisa Cook
