Trump dismisses one of the Fed's governors, undermining the bank's independence.

WashingtonDonald Trump announced Monday night the dismissal of Lisa Cook as a member of the board of governors of the Federal Reserve (Fed), the United States central bank. Cook had been appointed by former President Joe Biden and was the first Black woman to hold the position. The US president has invoked the powers granted to him by the Fed's founding charter to remove its members when there is adequate cause. The issue is that Trump has based his dismissal on accusations against Cook that she applied for mortgages by submitting fraudulent information, which calls into question the legality of the maneuver. The announcement of Cook's dismissal once again shakes the credibility of the independence of the US central bank, after the Republican has already threatened on several occasions to dismiss its chairman, Jerome Powell, if he does not lower interest rates.

"I have determined that there is sufficient cause to remove you from office," Trump wrote in a letter to Cook, which he also shared on his social network, Truth Social. The accusations against Cook were made a few days ago by the director of the Federal Housing Finance Agency, Bill Pulte, who claimed that Cook had committed fraud in the mortgage applications for two properties in 2021. One house was in Michigan and the other was in his home in Atlanta, and the two were reportedly married within 14 days of each other. After issuing the accusation, Pulte assured that he would present the information to the Department of Justice in a criminal referral.

Cook's dismissal comes with a veiled threat to Powell over interest rates. In the same letter announcing the dismissal of the Fed governor, Trump also refers to the "tremendous responsibility" the Federal Reserve has in setting interest rates and in regulating the Fed and its member banks. "The American people must have full confidence in the honesty of the members charged with setting policy and overseeing the Federal Reserve," the president says.

Trump has done nothing but threaten the Fed's independence since he began his pressure campaign against Powell. And, in fact, last week the Fed chairman For the first time, it timidly opened up to lowering ratesAt the conference in Jackson Hole, Powell noted that the economy "could justify" interest rate cuts in the future, but did not say when. The economist also warned thattariffsand the US president's deportation campaign threaten to trigger inflation, which is already around 2.7%.

The US central bank has been the benchmark for monetary policy until now, and has acted as a guide to the European Central Bank (ECB) on numerous occasions. Pressure against the institution puts the use of the dollar standard as a reference value at risk.

Cook's dismissal also coincides with the nomination ofand Stephen Miran for the vacancy that Adriana Kugler left the White House after abruptly resigning in early August. Miran is the chairman of the White House Council of Economic Advisers and a vocal defender of Trump's tariff policies, and promises to be the Republican's Trojan horse within the bank. With Cook's dismissal, Trump now has the opportunity to introduce a second Trojan horse, which would allow him to further influence the Fed's most important decisions, at a time when the US president sees the institution as a brake on his economic agenda. The new governors must be ratified by the Senate, but given the history of government secretary nominations, Miran is likely to be approved.

The announcement of Cook's dismissal also comes shortly before Powell's chairmanship expires at the end of May 2026. Governors can be nominated as candidates to lead the body. The process for selecting a new Fed chair is the same as for governors: the US president nominates a candidate, and the Senate must ratify the candidate for a four-year term.

US monetary policies are decided by the Federal Open Market Committee (FOMC), which includes the seven Fed governors, the chair, the vice chair, the president of the Federal Reserve Bank of New York, and four presidents of other Fed banks who rotate annually. A total of twelve votes are cast. This means that while nominating two governors would not give Trump the power to sway the vote, he could still influence decisions from within.