:max_bytes(150000):strip_icc()/GettyImages-2244842872-067a5e641d4e42c4a9fccd9ed1094cc7.jpg "Embattled Fed Official Has Lost Key Economic Data Point: Diner Chatter")
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Key Takeaways
- Federal Reserve Governor Lisa Cook declined to discuss details of her lawsuit to stop President Donald Trump from firing her in her first public remarks since the controversy began.
- The ongoing government shutdown has delayed publication of key economic indicators, making the Fed’s job of controlling inflation and keeping employment high more challenging.
Since unwillingly becoming the frequent subject of news headlines this year, Federal Reserve Governor Lisa Cook says she can no longer eavesdrop on diner patrons to hear what people are saying about inflation.
In her first public remarks since President Donald Trump attempted to fire her this summer, Cook shed some light on her thinking about how the Fed should set interest rates as it faces risks to its goals of keeping employment high and inflation low. She declined to discuss details of her ongoing lawsuit to prevent Trump from removing her from office, but did hint at how the uproar has affected her approach to her job.
“Before current events, I used to just get lost in Virginia and walk into a diner and just listen to people talk about how they experience inflation,” she said at a fireside chat event in Washington Monday. “I can’t do that anymore, but I interact with everyday people.”
What This Means For The Economy
President Donald Trump has attempted to remove Cook from office, in a move some analysts have said is a part of his campaign to remake the Federal Reserve and bring it under his control.
The government shutdown that began Oct. 1 has deprived the Fed of its most important official economic data that its members assess when setting monetary policy. That’s left Cook and other Federal Open Market Committee members to rely on data from outside organizations, a few surveys from the Fed itself, and anecdotes from business leaders and the public about the state of the economy.
Fed officials have always scoured all kinds of data, in the case of former Fed Chair Alan Greenspan, reportedly going so far as to monitor sales of men’s underwear for signs of impending recessions.
In a speech and a subsequent interview with David Wessel of The Brookings Institution, Cook said she supported the Fed’s decision to lower its benchmark interest rate by a quarter-point at its most recent meeting in October, and said she had yet to decide if the Fed should cut again at its next meeting in December.
Cook declined to go into detail about her current conflict with Trump, who attempted to fire her after accusing her of falsifying mortgage documents. Cook sued to halt her dismissal, which, if it were to go through, would undermine the Fed’s traditional status as independent from direct White House control.
Asked by an audience member to comment on the Fed’s independence, Cook said:
“I’m not going to say much, but I support it.”
