The White House has given Federal Reserve Governor Lisa Cook three weeks to respond to allegations of false statements on mortgage documents, TD Cowen analysts said. The firm puts a 75% probability that President Trump will use her response as grounds to fire her, but only a 25% probability he succeeds.
The White House has given Federal Reserve Governor Lisa Cook three weeks to respond to allegations of false statements on mortgage documents, according to TD Cowen analysts. The firm said the move marks Trump's second attempt to remove Cook from her position as a Fed governor for cause.
TD Cowen assigned a 75% probability that Trump will use Cook's response as grounds to fire her. Yet the firm puts only a 25% probability that he will succeed in removing her. Still, the analysts expect the legal process to extend beyond the end of Trump's second term, mirroring the timeline of his previous attempt to fire Cook over the same allegation. TD Cowen said Cook will likely remain in her position as the litigation unfolds.
The firm noted that the Justice Department has not pursued criminal prosecution against Cook over the alleged misrepresentation on her mortgage application. TD Cowen said the initial judge's ruling will be critical in determining the outcome.
If Trump succeeds in removing Cook, the analysts said he may target other Fed governors. That outcome, TD Cowen added, would set a precedent for future presidents to seek the removal of governors in the same way.
Source: Investing.com
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