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Lisa Cook's firing, her replacement with a Trump loyalist, and now threats of criminal indictment on Jerome Powell after repeated warnings by Trump that Powell needs to reduce rates.

The Federal Gov is using escalated means to coerce Fed behavior.

@DanW Cook hasn't been replaced though?

@DanW yeah, this seems premature

As litigation proceeds, she remains legally considered an active governor,[13] pending a judicial ruling on whether the president had authority to remove her.[14][15]

Good evening.

On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.

I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.

This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.

I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.

Thank you.

- Jerome H. Powell

I'm leaning towards resolving NO on this market if Lisa Cook is confirmed fired. AFAIK this would be the first time in history a sitting Fed Governor has been fired by the president.

@DanW I agree resolving no would make sense in that case, but it's kind of funny that the title includes two radically different scenarios.

@jessald Yeah, it's a silly attention grabbing title since "retain independence" is a subset of "exist".

I'm open to input on how to further clarify this market, I think this is a broad market that could end up being resolved on difficult subjective edge cases, and so I'd like to tighten up the resolution criteria.

@DanW I'm personally a fan of giving resolution criteria to multiple frontier LLMs and asking them for their proposed resolution. If not consensus, show them each other's responses

@Siebe That's a very unpopular idea without a commitment to verify sources: https://manifold.markets/WilliamGunn/is-it-good-practice-to-ask-a-llm-fo?r=V2lsbGlhbUd1bm4

Does pressuring the Fed chair to resign count? I would certainly think so, but just checking because this market is not tracking those more directly about Powell.

@DanW this market needs clarification please

@benjaminIkuta Unfortunately the initial resolution criteria was pretty vague & subjective because there are a lot of potential vectors for killing fed independence.

A major red line for me: any formal action from the US gov that intervenes in Fed decision making or major Fed staffing in an unprecedented way. Firing Powell before his term is up would resolve NO.

@DanW Yes, firing him would obviously be a clear cut case. If a NO resolution would require anywhere near that degree of happening, I would confidently bet this market even higher.

@DanW can you clarify that mere words without action would be insufficient?

@benjaminIkuta mere words without action would be insufficient, unless those words are threats that change Fed behavior.

If this was actually going to happen (abolishing the Fed, and/or putting monetary policy under direct control of POTUS) I'd expect a rather dramatic reaction from the stock market. However the resolution criteria say it would resolve "yes" under more modest changes than I imagined reading the question text.

Just curious if yes holders think this is a good or bad thing? For me if it's no longer independent, I'd sell all my US stocks.

@Sz no serious person would think this is a good thing economically

Wilcox gives the Court’s Republican majority a vehicle to overrule Humphrey’s Executor in its entirety — potentially ending independence for all federal agencies, including the Fed.

https://www.vox.com/scotus/408848/supreme-court-donald-trump-unitary-executive-wilcox

@Siebe If this ruling is found to be applicable to Fed Reserve staffing, or is used as such (ex: to fire Powell before his term ends) then this market will resolve NO.

How will you resolve this? What if its independence is only slightly reduced?

I hope so