Fed political turmoil: Of course, it wouldn’t be a day under the White House Big Top without Trump lobbing another grenade at the Fed. But this time it’s no dud — it’s live ordnance.
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President Trump announced the immediate removal of Fed Governor Lisa Cook, accusing her of falsifying mortgage documents and declaring that “the American people must be able to trust the honesty of those steering the central bank.” The move, posted to Truth Social like a cannon blast, comes just as the Department of Justice begins probing Cook following a referral from FHFA Director Bill Pulte, who alleged possible mortgage fraud.
For Trump, the timing is no coincidence. He’s been steadily tightening the vice on Democratic figures while also putting the squeeze on Powell’s Fed, and this is his boldest strike yet. Cook, who just days ago dismissed the uproar as little more than bullying over a tweet, now finds herself ejected from the policy table she vowed not to abandon.
Markets felt the shock immediately. The Dollar Index buckled, Treasury yields slipped, and S&P 500 futures sagged under the weight of the uncertainty. Traders know when a White House circus becomes a market event — and today, the tent poles rattled. The independence of the Fed, already a fraying banner, looks tattered against the gusts of politics.
What’s left is a central bank suddenly with a missing vote, a looming inflation test on Friday, and a president willing to make personnel changes with the flair of a ringmaster cracking the whip. For the market, the question isn’t just about Lisa Cook — it’s about how many more grenades are stuffed inside Trump’s jacket.