President Trump’s move to fire Lisa Cook could be the final piece he needs to take over the Fed. If it works, he could restructure the FOMC and approve rate cuts without even replacing Powell.

Seven Governors control the Federal Reserve and its District Bank Governors, and Trump already appointed three of them. If a new majority disregards precedent, it’d have tremendous power to set fiscal policy.

Trump’s New Fed Gambit

President Trump has quarreled with Fed Chair Jerome Powell on many occasions, threatening to fire him over interest rate cuts. The Fed has remained resolute, as the Supreme Court ruled that the President cannot fire its Chairman.

Last night, however, Trump took a new strategy, moving to fire one of its Governors, Lisa Cook.

This move is particularly interesting for a few reasons. First of all, Cook is categorically refusing to step down, claiming that Trump doesn’t have this power over the Fed. She’s even planning to sue. Moreover, Powell offered Trump an olive branch last week.

So, why is this aggression happening now? Several TradFi analysts are raising the alarm, claiming that this may herald the end of the Fed’s independence:

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Author: Landon Manning

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