Why Trump’s Fed Firing Matters for Your Money

Lisa Cook’s unprecedented dismissal, the legal battle ahead, and what it could mean for your wallet

Lisa Cook being sworn in as a member of the Board of Governors of the Federal Reserve System; Wikimedia Commons

No U.S. President has ever fired a Federal Reserve Governor. Until this past week. Trump fired Fed Governor Lisa Cook for alleged mortgage fraud.

But Cook hasn’t been charged with a crime. Nothing has been adjudicated. And she’s received no due process related to her “for cause” dismissal.

It’s like firing an employee you hired because they checked the wrong box on an employment form. Why did they do it? Would you fire them outright without understanding the facts or their intent?

That’s essentially what just happened at the Fed. Markets have largely shrugged off the firing for now, although long-term yields initially ticked higher; a subtle hint that investors are pricing in the risk.

But let’s be clear — this is not an isolated firing. Trump’s team was clearly digging for dirt on Fed Governors who they believed posed obstacles for lower interest rates (even though Fed Chair Jerome Powell recently signaled forthcoming lower rates).

If the White House can now fire Federal Reserve officials at will with only suspected “for cause”, it significantly compromises Fed independence. It means we need to start thinking less about what monetary policy and policymakers say and more about what Donald Trump wants.

This is only the beginning of a legal battle that not only could reshape the Federal Reserve but how we think about investing in America. The potential ramifications for your wallet are significant.

In the full analysis, we break down exactly how this could impact your investments and why Fed independence matters more than ever.