Trump Dismisses Federal Reserve Governor Lisa Cook
President Donald Trump has announced the termination of Federal Reserve Governor Lisa Cook, which has sparked concerns about the reliability of the US dollar.
On Tuesday, the White House Rapid Response X account shared a letter signed by Trump, officially removing Cook from her position at the Federal Reserve. He accused her of making false claims regarding one or more mortgage agreements, addressing her directly in the letter.
According to a report by the Associated Press on Tuesday, Cook indicated that she would not resign. She stated that Trump was attempting to remove her for “cause,” arguing that “no cause exists under the law,” and claimed that Trump “has no authority” to dismiss her. She concluded by affirming that she “will not resign.”
Implications for the Federal Reserve
The Federal Reserve operates with a considerable degree of independence from the US government. Alex Obchakevich, founder of Obchakevich Research, said that this independence “is the foundation for the stability of the US economy.” He elaborated:
Obchakevich suggested that Trump’s decision to fire Cook was motivated by “political reasons” and undermines the Fed’s autonomy. He explained that this could lead to market uncertainty and deteriorate economic sentiment, adding:
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Bitcoin’s Role in the Future
When asked if Bitcoin (BTC) might serve as a potential solution, Obchakevich remarked that in the long run, “Bitcoin could weaken the dollar’s role as a reserve currency.” However, he noted that Bitcoin does not currently seem like a short-term solution.
Political Tensions with the Federal Reserve
The announcement comes on the heels of repeated confrontations between Trump and the Federal Reserve leadership. In mid-April, Trump criticized Federal Reserve Chair Jerome Powell for allegedly not cutting interest rates swiftly enough during a trade war initiated by the US.
He even suggested the possibility of Powell’s termination, stating, “Powell’s termination cannot come fast enough!”
Market participants quickly rebutted this idea. Notable crypto entrepreneur Anthony Pompliano voiced his opinion, stating that Trump should refrain from executing his threat to dismiss Powell.
“I do not believe that the president of the United States should come in and unilaterally fire the Fed chair,” he remarked, warning that such an action would set a troubling precedent.
Additionally, US Senator Elizabeth Warren cautioned that if Trump were to fire Powell, it could undermine investor confidence in the integrity of US capital markets and potentially lead to a financial crash.
