The Federal Reserve has been historically independent of the White House. Here's why

President Donald Trump called for a Federal Reserve governor to resign over an accusation of mortgage fraud and has publicly pressured the Fed chair, Jerome Powell, to cut short-term interest rates. Powell has resisted calls to lower rates immediately, citing the need to monitor effects of Trump's tariffs on inflation. Trump has threatened to fire Powell and criticized Fed management of a $2.5 billion renovation project. Forcing out Fed leaders would undermine the central bank's long-standing independence, which economists and investors value for enabling difficult anti-inflation policy choices that can slow the economy and cost jobs.

President Donald Trump this week called on a Federal Reserve governor to resign over an accusation of mortgage fraud, the latest effort by his administration to exert greater control over one of the few remaining independent agencies in Washington.Federal Reserve governor Lisa Cook says she won't leave her post.Trump has repeatedly attacked the Fed's chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.

Powell, who will speak Friday at an economic symposium in Jackson Hole, Wyoming, says the Fed wants to see how the economy responds to Trump's sweeping tariffs on imports, which Powell says could push up inflation.Powell's caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt. Trump has also accused Powell of mismanaging the U.S. central bank's $2.5 billion building renovation project.

Firing the Fed chair or forcing out a governor would threaten the Fed's venerated independence, which has long been supported by most economists and Wall Street investors. Here's what to know about the Fed: Why the Fed's independence matters The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls - which it typically does when the economy falters - the Fed can make borrowing cheaper and encourage more spending, accelerating growth and hiring.

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