On August 26, 2025, Donald Trump fired Lisa Cook, a member of the Federal Reserve, citing her alleged deception on mortgage applications. This firing elevates substantial concerns regarding Fed independence and the strength of the US dollar.
Firing of Lisa Cook and Her Response
On August 26, 2025, President Donald Trump fired Lisa Cook, a Federal Reserve Governor and the first Black woman on the board, claiming she lied on mortgage applications. Cook, appointed by Joe Biden in 2022 with a term until 2038, responded that Trump lacks legal standing for her dismissal and confirmed her intention to remain in her position.
Risks to Fed Independence
Experts like Alex Obchakevich from Obchakevich Research warn that the Fed's independence is critical for economic stability, ensuring that monetary policy remains separate from political pressure. He noted that Trump's actions, likely driven by political motives, could undermine market confidence, weaken the dollar, and even pose a recession risk.
Political Risks for US Economy
Historically, Trump has had conflicts with the Fed, criticizing Chair Jerome Powell for not cutting interest rates quickly enough and suggesting his firing in various statements. In April, Trump called for Powell's ouster, which drew responses from figures like crypto entrepreneur Anthony Pompliano and Senator Elizabeth Warren, warning of risks to trust in US markets.
Obchakevich pointed out that while Bitcoin might challenge the dollar's role long-term, it does not offer a quick solution. The firing of Cook, following unverified claims by Trump appointee William Pulte regarding her mortgages, has raised concerns over political interference in the Fed, likely unsettling investors and markets.
Donald Trump's dismissal of Lisa Cook raises serious questions about political interference within the Federal Reserve, potentially harming trust in US financial markets and the resilience of the national currency.
