00:00Does President Trump have legal cause to fire a member of the Fed's Board of Governors?
00:07Right now, we don't know.
00:09But the answer to that question will have major implications for the global economy.
00:14Today, an attorney for Fed Governor Lisa Cook announced a lawsuit challenging President Trump's attempt to fire her over allegations of mortgage fraud.
00:24In a statement, Cook said, quote, President Trump purported to fire me, quote, for cause when no cause exists under the law and he has no authority to do so.
00:35I will not resign, end quote.
00:38The Justice Department has said it plans to investigate the allegations, but Cook has not been charged and denies all wrongdoing.
00:45Still, this afternoon, President Trump insisted that even the appearance of potential fraud was enough to fire her.
00:56She seems to have had an infraction and she can't have an infraction, especially that infraction because she's in charge of, if you think about it, mortgages.
01:05And we need people that are 100 percent above board and it doesn't seem like she would.
01:10Just moments ago, the Federal Reserve acknowledged that Cook is challenging the president's firing.
01:18Here's the statement.
01:19A spokesperson said this, quote, long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis and the long term interests of the American people.
01:33As always, the Federal Reserve will abide by any court decision.
01:39Now, this is the first time in American history that a president has attempted to fire a Fed governor.
01:48And there's a reason for that.
01:49All around the world, governments, companies, banks, they expect the Fed's decisions about monetary policy to be, for the most part, if not entirely, non-political.
02:02But President Trump wants lower interest rates and he wants them yesterday, basically.
02:07He has spent months publicly insulting Fed Chair Jerome Powell.
02:11The firing of Cook marks a dramatic escalation in his attempt to assert control over yet another American institution.
02:19Look, the Federal Reserve, as it is, has historically been the best.
02:26And one of it is because it's independent.
02:29It's very difficult to try to get them to do something they shouldn't do.
02:33But if you think that you're going to wake up one day and discover that the Justice Department may or may not be indudited, it's highly embarrassing.
02:40Listen, it's terrible to find out that you might be charged by the Justice Department.
02:47But you don't know.
02:47But the president is taking swift action.
02:50It's very intimidating.
02:53Intimidating indeed.
02:54All right.
02:55My panel is here.
02:56They're going to join in just a moment.
02:57We're going to start with CNN's Jeff Zeleny, who's outside the White House.
03:00CNN's Phil Mattingly, who is here for us in the D.C. Bureau.
03:03And, Jeff, let me start with you, because, of course, we were listening to – it was a lengthy, shall we say, cabinet meeting.
03:10What more are we hearing – what more is he saying about the decision to fire Lisa Cook, or try, I should say?
03:16Three hours and 17 minutes, as the clock goes, one of the longest, at least, public sessions of a cabinet meeting.
03:23But it was the comments about Lisa Cook that certainly caught our attention.
03:27Look, her term was expected to go until 2038.
03:31She was, of course, nominated by President Biden, confirmed by the Senate.
03:36It was a 50-50 vote.
03:37Vice President Harris had to break the high back in 2022.
03:41But her term is just getting started.
03:44But President Trump clearly has been making many moves to take control of the Fed, obviously blasting Jerome Powell at every turn, calling him too late.
03:54He's accusing him of being too late in lowering interest rates.
03:57Well, clearly, the president and the White House have been making steps to try and exert their control really throughout the government.
04:04But the Federal Reserve is a different matter, because, of course, it's the essential bank, but it's also independent.
04:10A U.S. president has never removed a governor on the Federal Reserve before.
04:16So this is certainly entering new legal territory.
04:20And it looks like it will go, obviously, through the courts, likely to the Supreme Court.
04:25And the question now is what happens between now and then.
04:29The president said he's firing her for a cause, citing mortgage fraud.
04:34Of course, that is unproven.
04:35No crime has been charged or convicted or proved to be committed.
04:40The Department of Justice is apparently investigating, but it's about what happens in the interim.
04:46The Fed is meeting for the next meeting in mid-September.
04:50Will the White House try and seat someone else?
04:52Officials are not telling us exactly what the president's plans are as this is a litigated.
04:56But, Casey, there is no doubt about it.
04:58The bottom line, the president wants to control the Fed.
05:00All right.
05:02So, Phil Mattingly, help us understand exactly what this means.
05:08I mean, you noticed when you were watching this, I presume you watched all three hours
05:12and 17 minutes of this cabinet meeting.
05:14Correct me if I'm wrong.
05:16But you seem to notice a sort of caution that the president was using when he was talking
05:21about his authority here.
05:22Yeah, the reason this stood out to me is I did watch all three hours and 17 minutes.
05:28And the only thing that the president wasn't expansive on in his commentary was Lisa Cook
05:34and his decision to attempt to fire her, to move to fire her last night.
05:39And that caution, and especially paired with the very cautiously and legalistic way the letter
05:47that he sent or posted on Truth Social last night at 8 p.m., to Jeff's point, the sheer
05:53lack of information about next steps, how this moves forward from people around the administration,
05:58inside the administration, underscores the reality of this moment.
06:03While the president and his team may believe that they have this authority, as kind of up
06:07in the air as that is, and questioned by legal experts that it is, there is no precedent
06:12for this.
06:13There is no roadmap for this.
06:14Nobody's totally sure how this moves forward.
06:16What we are sure of, though, is while this is based on what the president referred to
06:21as an infraction, not saying it was mortgage fraud like some of his advisors, it is clear
06:26what he wants from it.
06:28And he actually laid it out, talking about one existing opening on the Fed board and a potential
06:32second.
06:33Listen.
06:35We just put a very good man in one position.
06:40We might switch him to the other.
06:43It's a longer term and pick somebody else.
06:45But we're very happy with the person we have in there.
06:48And we'll have a majority very shortly.
06:50So that'll be great.
06:51Once we have a majority, housing is going to swing and it's going to be great.
06:56People are paying too high an interest rate.
06:59That's the only problem with housing.
07:00Casey, I just point that out because I think it's really important to keep that in mind.
07:06There is a lot of unknowns and a huge number of questions and a very intensive debate and
07:10political fight ahead.
07:11The goal here, without any question at all, is to seize a majority of the Federal Reserve
07:16Board.
07:16And that's exactly what the president just said.
07:17Indeed.
07:19All right.
07:20Phil Mattingly, Jeff Seleney, thank you both very much.
07:22Really appreciate you starting us off.
07:23All right.
07:24Our panel is here.
07:25U.S. Economy Government Managing Editor at Bloomberg News, Mario Parker, the host of
07:28the Chuck Toddcast.
07:29Chuck Todd, CNN political commentator, former Biden White House Communications Director,
07:33Kate Bedingfield, and CNN senior political commentator, Scott Jennings.
07:36Welcome to all of you.
07:37Thank you all very much for being here.
07:39Chuck Todd, this is, in a big picture way, you know, there are so many things about Donald
07:47Trump and his presidencies that we call unprecedented.
07:51This is something that has quite literally, no one has ever tried to do this before.
07:55The Federal Reserve has been, as Jim Cramer was basically outlining, the best of the best
08:01for the foundation, the underpinnings of our global financial system for decades.
08:04What do you think this all means, big picture?
08:07Well, this is a real danger to the economy.
08:08The last time a president had this kind of, when you have political control over the Fed,
08:13you get terrible outcomes.
08:15When Richard Nixon basically coerced Arthur Burns into terrible decisions.
08:19This is why we invite you.
08:20I understand that.
08:20This goes way back.
08:22We had a decade of stagflation because he wanted lower interest rates and it created a
08:26problem.
08:28Someone at my house is reading a biography of J.P. Morgan, by the way, and something similar
08:31happened in that era as well, but continue.
08:33And I do think what's happening here is that Lisa Cook is essentially a stand-in for Jay
08:37Powell, right, which is, this is, I think, Trump, the administration and the White House
08:41basically testing the electric fence, right?
08:44Do they have the authority to do this?
08:46I think that is why the cautious words are being used because, first of all, some lawyer,
08:50at least somebody got to the president and said, hey, be careful.
08:53Whatever you say actually could get used in her lawsuit challenging your ability to do
08:58this, number one.
08:59But the Supreme Court warned, has already warned, that the Fed was a different category here
09:05when it sort of gave him some authority at some of these executive agencies that he has
09:10had authority over.
09:11And so I just think this is a test case.
09:15And they decided it's better to test the case, that the markets won't punish him, right?
09:21If he tried to do this with Powell, the markets would crater.
09:23The world markets would crater, the economic, the, but doing it with picking on one governor
09:29to sort of, you're testing to see, do I have this authority or not?
09:33I'm going to, the least damaging attempt to do.
09:35I mean, it's pretty classic Trump, right?
09:37Push the envelope and see how far it'll go.
09:39Pick on somebody nobody's ever heard of so that you can essentially shape the narrative
09:45of who she is or try to shape, you know, look, she's got no due process here.
09:49I mean, I assume, I don't want to assume anything with our courts today, but I assume he loses
09:54and loses bigly.
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