Trump’s threat to fire Fed’s Cook has Wall Street weighing accountability vs intervention
The markets are trembling this morning after President Trump announced his plan to dismiss another member of the FOMC Open Market Committee (FOMC). While some supporters may argue in the event of accountability for voting members in the Federal Reserve, many of them in Wall Street raise this to increase the intervention by the White House.
President Trump said yesterday that he “removed” the ruler of the federal reserve, Lisa Cook from his post, claiming that “there is a sufficient reason for belief [Cook] He has made wrong statements on the mortgage agreements one or more. ”
The move came after Bill Polly, head of the agency that organizes the mortgage giants, Fani May, Faridi Mac and Trump, claimed on the social networking site X that Cook claimed two initial housing (in Ann Arbour, Michigan and Atlanta) in 2021 in order to secure the conditions of the best mortgage.
Cook responded to the questions, saying in a statement: “I have no intention of intimidation to step down from my position because of some questions that were raised in a tweet.”
However, she added: “I intend to eat any questions about my financial history seriously as a member of the federal reserve, so I collect accurate information to answer any legitimate questions and provide the facts.”
To remove cooking from her seat is to provide an opportunity for the White House: to replace it with a more economical expert, open to the way President Trump thinks about monetary policy.
Cook – who was appointed by President Biden – has so far supported the decision to maintain the basic rate at its current level from 4.25 % to 4.5 %, a step that angered the White House. In fact, Trump has been angry to the point that he threatened to launch Jerome Powell on his “very late” approach to the basic rate.
Trump also celebrated when a member of the FOMC team, Adriana Cogler, resigned earlier this summer and opened a place for a Trump’s nomination member. Stephen Moran was nominated as a temporary economist in this role, as El Ayoun focuses heavily on the individual who was appointed to the president to replace Powell in 2026.
The battle between the White House and FED (it can be said to be unilateral, as the Federal Reserve is trying to direct politics well) that many analysts put the latest measures from Trump as further interference in the central bank-where the independence of financial institutions is evaluated all over the world.
“The attempt is not quite unprecedented. In the context of the recent comments from Trump, whether the president believes the procedure he justifies is that the procedure is not related,” said Paul Donovan of UBS this morning.
Dunovan notes, there are obstacles to shooting, as Trump has already appointed the majority of federal reserve rulers, including its president, and “Federal Reserve has been independent, so far.”
Moreover, “If the separation of the courts, the Senate must confirm the successor. FOOC contains the presidents of the regional federal reserves who can seek an independent policy, and faith in these checks may limit the negative market reaction in the short term.
Market reaction
“With Trump moved that he is escalating with the American administration’s attempts to exercise influence on the federal reserve, the dollar witnessed a decrease in the knee by about -0.4 % on the news,” wrote Jim Reed from Deutsche Bank this morning. However, the decrease decreased significantly in the following hours.
As other assets chapters turned, gold rose by 1 % and got most of the gains, while the S&P 500 and NASDAQ decreased. “Meanwhile, the cabinet curve witnessed a significant swelling, as the 2YR -0.7BS trading decreased but 10 years higher +2.9bps and 30yr +4.5bps to 4.93 %,” added ReID.
“” luck: “The destruction of institutions with illegal behavior and the seizure of the compassionate energy comes with the costs of the Americans. The dollar continues with weakness as American governance continues to corrosion. This means higher prices for all goods. President Powell must ensure that Lisa Cook is not removed as a result of these educational and medium procedures from the president.”
At the other end of the spectrum, Professor Warton Jeremy will see that the discussion about Cook’s position as the short -term title instead of the most important economic basis: America’s monetary policy path in the long term.
Powell wrote in Jackson Hall, he wrote Sijal for Wisdomtree, where he was major economists, “It was an appropriate and long axis.” He continued: “From a political point of view, the surrounding situation … Cook adds noise, but there is a little matter.
“The Trump’s effect may be waving in the public discourse, but from an operational point of view, the Federal Reserve has already turned into the corner. The most important question is whether Powell will quickly reduce enough to meet political demands. It can accelerate the printing of negative functions from the pace.”
2025-08-26 10:36:00
