1. Nearly 600 economists support Fed Governor Lisa Cook's independence. 2. They warn political pressure could undermine confidence in the Fed. 3. Cook is suing Trump over her controversial removal threats. 4. Her potential removal could destabilize economic confidence and policy. 5. The Fed's independence is crucial for economic stability.
Political instability surrounding the Fed may lead to market volatility, as seen historically in 2018 when political pressures affected the Fed's decisions, causing market pullbacks.
The independence of the Fed is vital to economic policy and investor confidence, which directly influences the broader market, particularly the S&P 500.
Immediate effects may be seen as uncertainty affects investor sentiment, similar to previous Fed leadership controversies leading to short-term sell-offs.