Donald Trump’s efforts to get the US Federal Reserve to cut interest rates are relentless. The US president has already goaded and threatened the Fed chair Jay Powell. This month he nominated his ally, Stephen Miran, to a vacant board slot. On Monday night, he took a more forceful approach. With unproven allegations of mortgage fraud hovering over governor Lisa Cook, Trump saw an opening, and fired her “effective immediately”, citing his powers to remove her “for cause”. Cook claims “no cause exists under the law” to justify her sacking. A court battle is set to ensue.

Whatever the outcome, the assumption that the Fed will set rates based on its own economic judgments has been dealt a severe blow by Trump’s determination to undermine it. The president has recently called for policy rates to go down to 1 per cent, well below their current perch at 4.25 to 4.5 per cent. He may think this will buoy voters and reduce government borrowing costs. But by undermining the central bank’s credibility he risks making the economic situation worse.

The president’s move against Cook — the first Black woman to serve on the Fed’s board of governors — is unprecedented. Even if she is found guilty of falsifying mortgage statements it is unclear if the courts will deem that sufficient for her to be fired. But, if they did, it could erase any notion that the Fed is independent. Cook has been in support of keeping rates on hold in order to parse the price-raising effects of Trump’s tariff policies. The president could replace her with another pliant governor, and use his insiders to undermine other rate-setters.