Political meddling may harm the economy in the long term

Increasing political pressure that threatens to undermine the Federal Reserve’s independence may significantly damage the economy in the long term, even as lower interest rates resulting from this pressure will likely lead to a short-term economic boost.

Long a critic of Chairman Jerome Powell for consistently not lowering interest rates, Trump has now agreed for the Justice Department to open an investigation into one of the bank’s board members over claims she misled on a mortgage application. He has also called for Lisa Cook’s firing, even as the claims are being investigated.

Cook, a Federal Reserve governor since 2022 and the first black woman in her position, has sued the Trump administration in federal court, arguing that her dismissal would be both unlawful and politically motivated. She

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