World Business Report Growing pressure on the US Federal Reserve
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Aug 26, 2025 Kenneth Raghav, a Harvard Economics Professor and former IMF chief economist, dives into the turmoil surrounding the U.S. Federal Reserve. He discusses President Trump's call for the removal of Federal Reserve Governor Lisa Cook amid fraud allegations, examining the implications for interest rate policies. The conversation also highlights Generation Z's savvy approach to retail investing and their focus on financial security. Additionally, Raghav explores South Africa’s film industry as it seeks global recognition amid economic challenges.
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Unprecedented Push To Oust Fed Governor
- President Trump publicly called for Fed Governor Lisa Cook's removal over unindicted mortgage fraud allegations.
- Cook denies them and says she will stay, creating an unprecedented constitutional and market tension.
How Fed Decisions Are Made And Market Expectations
- Fed governors sit on a committee that votes on interest rates and publish a dot plot revealing their views.
- Markets widely expect a September rate cut, making political moves against governors especially significant.
Political Tactics Versus Legal Norms
- Firing a sitting Fed governor without indictment departs from US norms and risks bypassing judicial processes.
- The move mirrors broader tactics in the Trump administration to act on allegations rather than await court outcomes.
