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

WashingtonThe attempt to fire Fed Governor Lisa Cook is the latest action by Donald Trump in his campaign of harassment against the US central bank and shakes the credibility of its independence. In a legal maneuver of dubious legality, the US president said Monday night that he was dismissing Cook based solely on allegations of having submitted fraudulent information to apply for mortgages for two residences. In a statement issued by her lawyer, Cook has already stood up to Trump: "I will not resign." The governor maintains that "there is no legal cause" for her to do so, and her lawyer, Abbe Lowell, adds: "This attempt to fire her, based solely on a reference, lacks any legal authority or basis. We will file a lawsuit pursuing this legal action."

The dismissal of Cook—who was the first Black woman to hold the position since former President Joe Biden appointed her—is an unprecedented move in the history of the Federal Reserve and threatens to set a dangerous precedent. The Fed's founding statutes establish that the president can remove governors whenever there is proven professional negligence or a crime. By removing Cook solely based on allegations, and not a judicially proven crime, Trump is attempting to create a much more lax reinterpretation of the rule that would give him more power in the future to do the same to other Fed members who do not comply with his demands.

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 in Achichi, and the other in Achichi, and the other in Achichi, the main one, in the documents filed for each case fourteen days apart. After issuing the accusation, Pulte assured that he would present the information to the Department of Justice in a criminal referral.

This modus operandi is the same one that Trump has also been employing to persecute other political enemies, such as California Senator Adam B. Schiff, who led the congressional investigations against Trump in his first term, and Letitia James, the New York attorney general, who won the New York attorney general, who won the New York attorney general, who won the New York attorney general.

Cook's dismissal comes with a veiled threat to Powell over interest rates. In the same letter in which he announced the dismissal of the Fed governor, Trump also referred to the "tremendous responsibility" that the Federal Reserve has in setting interest rates, and in regulating the reserve 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," says the president.

Trump has done nothing but threaten the Fed's independence since he began his pressure campaign against Powell. One of the reasons Trump wants the Fed to lower the price of money is to make the cost of US debt cheaper.

This August, the Treasury Department placed the public debt at a record high: $37 trillion. Even with the revenue Trump expects to obtain from tariffs, it is still likely that the country will register a deficit of approximately 6% this year.

Last week, for the first time, the Fed chairman 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.