US futures slip after Trump’s attempted firing of Fed governor
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More news: US stock index futures slipped on Tuesday, exacerbated by a rise in longer-dated Treasury bond yields after Trump moved to sack Federal Reserve governor Lisa Cook for cause, renewing concerns about the independence of the US central bank.
Late on Monday Trump announced he would remove Cook over alleged mortgage fraud, prompting unease among investors about any potential impact the firing could bear on the Fed’s September meeting.
If Trump’s move is successful, he would be able to nominate a new member of the Fed board, giving him a 4-3 majority.
At 9:00am ET, Dow E-minis were down 38 points, or 0.08%, S&P 500 E-minis were down 4.00 points, or 0.06%, and Nasdaq 100 E-minis were down 20 points, or 0.09%
US 10-year and 30-year Treasuries rose briefly before easing back, with 30-year yields up 0.04 percentage points at 4.93%.
The FT reports that Goldman Sachs said on Tuesday morning: “We view markets’ response to the headlines as more characteristic of risk-off across US assets, rather than purely a dovish policy shock.”
“Challenges to Fed independence pose clear downside risks to the dollar,” the Wall Street bank added.
Trump moves to sack US Fed governor Cook 'immediately'
The news: US President Donald Trump moved to fire Federal Reserve governor Lisa Cook “effective immediately” late Monday night, arguing that he had “sufficient reason” to believe she had made false declaration on her mortgage agreements.
The context: A letter posted by Trump to his Truth Social account shows the President cite his powers under the US constitution and US law to remove her from her post.
“The Federal Reserve Act provides that you may be removed, at my discretion, for cause,” Trump wrote.
The move follows a criminal referral launched by Federal Housing Finance Agency director Bill Pulte last week, which urged the Justice Department to investigate alleged irregularities in Cook's mortgage applications.
Pulte alleged that Cook sought mortgages on two properties, describing both of them as her primary residence, in applications filed 14 days apart. He claimed that one of the homes was later advertised for rent. Pulte alleged that Cook “appears to have acquired mortgages that do not meet certain lending requirements and could have received favorable loan terms under fraudulent circumstances.”
In an emailed statement seen by ABC News, Cook said she will not resign, adding: "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so.”
Cook’s attorney, Abbe Lowell, said Trump's "reflex to bully is flawed and his demands lack any proper process, basis or legal authority…We will take whatever actions are needed to prevent his attempted illegal action.”
Should Cook be successfully ousted as a Federal Reserve governor, Trump will have the opportunity to appoint a new governor loyal to the administration, giving him a 4-3 majority on the Fed board.
The sources: Trump Truth Social, ABC News, FT, Reuters
