High-ranking official Lisa Cook faces potential dismissal from her position as Federal Reserve Governor, as former President Donald Trump petitions the Supreme Court for her removal.
The Federal Reserve's decision to lower mortgage rates has sent shockwaves through the financial world, with the crypto market experiencing a significant rally and a legal controversy surrounding the appointment of a new Fed Governor.
In a move that was widely anticipated, the FOMC made a 25 bps mortgage rate cut this year, leading to a surge in the prices of major cryptocurrencies. The Bitcoin price has broken above $117,000 following the mortgage rate cut, while Binance Coin (BNB) has surpassed the psychological $1,000 level for the first time.
The Fed's decision was unanimously supported by all Fed officials, including the controversial Lisa Cook, who was reinstated as a Fed Governor after Trump's earlier attempt to fire her over mortgage fraud allegations was overturned by the District Court. However, the president's attempt to remove Cook is still ongoing, with the Justice Department filing a petition to allow him to do so.
The Solicitor General also requested an immediate administrative stay of the preliminary injunction, and the Appeals Court had rejected Trump's petition to stay the ruling reinstating Cook just hours before the FOMC took place on Tuesday. It remains unclear if Cook's removal will be implemented following the court proceedings.
The nomination of Stephen Miran, a Trump appointee, to replace Adriana Kugler was announced prior to the FOMC meeting. Miran was expected to join other Trump-appointed members in favoring a significant mortgage rate cut, reflecting a dovish stance. However, during the meeting, Miran was the only dissent, voting for a 50 bps cut instead of the 25 bps that was ultimately implemented.
Trump's criticism of the Fed for its refusal to lower mortgage rates has continued, with the president urging Powell to make a higher mortgage rate cut than he had in mind. Despite this, the Fed's decision to cut mortgage rates has been widely praised by economists and investors alike, as it is seen as a necessary measure to boost the economy amidst the ongoing pandemic.
The FOMC's decision to cut mortgage rates has been a significant development in the ongoing saga surrounding the Fed and the Trump administration. As the legal proceedings regarding Cook's removal continue, the focus will shift to the role that Miran will play in shaping the Fed's monetary policy in the coming months.
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