economy

Tensions between the White House and the Federal Reserve are escalating. Fed Governor Lisa Cook told the U.S. Supreme Court that if President Donald Trump were allowed to remove her, it would trigger a collapse of financial markets and cause irreparable damage to the independence of the U.S. central bank.

Dispute Over Mortgage Fraud Allegations
Trump’s team is pushing to oust Cook over alleged irregularities in her mortgage applications. Her lawyers argue that the accusations are legally insufficient and do not meet the statutory standards under the Federal Reserve Act. In a Thursday filing, they warned that her immediate dismissal could spark “chaos and legal uncertainty,” potentially leading to a scenario in which two different candidates compete for the same Fed seat at the same time.
The Department of Justice already petitioned on September 18 for the Supreme Court to overturn a lower court decision that blocked Trump from acting. Yet two lower courts — Judge Jia Cobb and later the D.C. Court of Appeals — upheld the block, ruling that the White House’s case did not meet the legal threshold.

Warnings from Former Fed Chairs and Treasury Officials
Prominent economists have joined the defense of Cook’s position. Former Fed Chairs Ben Bernanke, Alan Greenspan, and Janet Yellen issued a joint letter warning that removing Cook would set a historic precedent and seriously undermine public trust in the Fed’s independence. The letter was also signed by former Treasury Secretaries Larry Summers, Robert Rubin, Jacob Lew, and Henry Paulson, as well as former IMF chief economist Kenneth Rogoff.
They emphasized that allowing the removal of a sitting member of the Board of Governors would turn the Fed into a political tool and jeopardize the long-term stability of the U.S. economy.

Trump Pushes Case Directly to the Supreme Court
Despite previous rulings, Trump’s legal team bypassed the usual process and escalated the dispute straight to the Supreme Court. Their goal is to have the block lifted immediately, so that Cook can be removed even before the full case is heard. Her legal team has warned this could create an absurd situation in which Trump nominates a replacement while Cook is still officially in her position.

Cook Continues Her Work
In spite of mounting political pressure, Lisa Cook continues to perform her duties at the Fed. At the most recent meeting, she voted in favor of a 25 basis point interest rate cut. She has made it clear that she will not step down voluntarily and has no intention of resigning from her role.

#LisaCook , #Fed , #TRUMP ,#USPolitics , #economy

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Japan is taking another step to strengthen its economic alliance with the United States. The Ministry of Finance has announced the creation of a new investment facility within its state-owned development bank to support a massive trade package worth $550 billion.

Financing and Expansion Support
The package will be funded through equity, loans, and guarantees provided by the Japan Bank for International Cooperation (JBIC) and the Nippon Export and Investment Insurance (NEXI). The new facility within JBIC will help Japanese companies expand abroad, particularly in sectors critical to the country’s economic security.
To make this possible, the ministry revised regulations governing JBIC, allowing broader investment activities in developed countries, including the automotive and pharmaceutical industries.

Agreement Between Tokyo and Washington
Japan and the U.S. signed a memorandum of understanding earlier this month outlining the details of the partnership. Both nations agreed to focus on strategic sectors such as semiconductor production, energy, metals, pharmaceuticals, and shipbuilding. The deal is set to last until January 2029, coinciding with the end of Donald Trump’s presidential term.
According to U.S. Commerce Secretary Howard Lutnick, returns from the projects will first go toward recovering the initial investment. Profits will then be distributed, with the U.S. receiving 90% and Japan the remaining 10%.

Building U.S. Infrastructure
The U.S. will also establish an investment committee chaired by Lutnick to select projects funded through Japanese capital. Washington has already indicated that the funds will be directed toward strengthening domestic manufacturing — from nuclear plants and pipelines to semiconductor factories and quantum computing technologies.
Both nations also agreed to construct a liquefied natural gas pipeline in Alaska. Additionally, Japan committed to purchasing $8 billion worth of agricultural products as well as long-term imports of LNG and biofuels.

A Historic Deal
White House spokesperson Kush Desai described the agreement as the largest investment deal ever signed, calling it a cornerstone for ushering in “a new golden age of America.” At the same time, Washington pledged to lower tariffs on Japanese products from 25% to 15%, giving Tokyo greater access to U.S. markets.
The deal represents not only an economic partnership but also a geopolitical signal: the U.S. and Japan are tightening their alliance at a time when global markets face intensifying competition and mounting tensions across Asia and beyond.

#Japan , #usa , #TradeDeal , #GlobalMarkets , #economy

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