This write has already stated that the decision to remove Fed Governor Lisa Cook from the Board of Governors is aimed at undermining the Federal Reserve’s (Fed’s) independence. This was the most significant event of the week.

The Fed, as a public entity, oversees the financial system of USA, managing currency flow, regulating inflation through monetary policy, offering credit for business activities, and setting interest rates.

The Central Bank’s independence is crucial in order to prevent political interference that could be employed to stimulate economic growth in extraordinary situations.

Politicians often seek lower interest rates to curry favour with the business community and borrowers. However, there are laws in place to protect the Central Bank and its members, which could be altered through legislative action.

The Fed’s credibility serves as a crucial policy tool, as central banks rely on data rather than succumbing to political pressures.

The removal of a Fed Governor is likely to undermine the Central Bank’s independence. Out of seven board members, Trump has appointed three thus far. While the Federal Reserve President serves a five-year term, the Governor is appointed by the President for a 14-year term, pending Senate approval.

Fed Governor Lisa Cook has initiated a lawsuit........

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