Marketplace All-in-One "The president has just made us a higher-risk country"
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Aug 26, 2025 The discussion begins with a heated analysis of the president's attempt to fire a Federal Reserve governor, raising questions about central bank independence and its impact on the financial system. Experts weigh in on the legal implications and risks of politicizing economic governance. The conversation then shifts to the relationship between the Fed's benchmark rate and mortgage rates, revealing how investor anxieties over national debt shape the housing market and influence buyer behavior.
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Fed Governors Aren't At-Will Employees
- Federal Reserve Board members cannot be fired at will; the law allows removal only for cause such as malfeasance or gross negligence.
- The allegation of mortgage fraud against Lisa Cook is unproven and therefore does not clearly meet the legal standard for cause.
Due Process Lacking In Rapid Accusations
- Karen Petrou highlights that Twitter accusations and immediate calls to fire lack due process and no investigation occurred between claim and denunciation.
- She emphasizes that U.S. norms presume innocence until proven guilty even for cause-based removal.
Independence Built To Preserve Credibility
- Congress designed the Federal Reserve to be insulated from politics to avoid politicized decisions on key economic policy.
- That insulation preserves the Fed's credibility and helps stabilize economic expectations.