US President Donald Trump speaks during a meeting with Ukrainian President Voludmir Zelinsky and European leaders in the Eastern Chamber of the White House in Washington, DC, on August 18, 2025.
Andrew Caballero -Rynolds | AFP | Gety pictures
President Donald Trump’s efforts to dismiss the ruler of the Federal Reserve, Lisa Cook, revolve around the launch of a person: it is a maneuver, if it succeeds, it will constitute a seismic shift to an institution that has been over the ages of politics.
Since he took office in January, Trump has placed the federal reserve directly at the intersection of the executive. He reprimanded central bankers to not lower prices, and threatened to remove the chair Jerome PowellAnd now I have taken the unprecedented step to try to impose a actually cook.
From the president’s point of view, he looks forward to reforming what was an unpopular institution, and is often blamed Fugitive That struck the United States after the Kofid pandemic. Trump sees lower interest rates as a way to federal debt management swelling while strengthening the housing market, which was a budget for otherwise The growing economy.
However, legal scientists as well as financial market experts, current and former officials in the Federal Reserve say that Trump’s movements are not only threatened to make the federal reserve more political but will also undermine the main pillars of the American financial system.
“We are on a road that will erode the independence of the central bank,” said Catherine Jadis, a professor at Colombia’s Law College. “It will be an incredibly charged with the health of the economy in the long run to lose the federal reserves the credibility he spent decades in trying to build it.”
Independence in the Federal Reserve issue is a term used to describe its freedom from the external political influence to determine the monetary policy that is the best for the American economy. This is particularly the case if these decisions are unpopular, such as when the Federal Open Market Committee raises interest rates to reduce inflation.
But there is more stake more than just the level of the three rates controlled by the Federal Reserve.
What is controlled by the painting, and what does not control it
If Trump gets the majority of the members of the Governor’s Council to vote the way he wants – and the evidence at the present time, it is definitely minimal that he can achieve such a goal – it will allow him to reach the main cranes that control the economy as well as the nation’s financial infrastructure.
For example, the Board of Governors, which consists of seven members of organizational authority and enforcement of banks, owns the banks.
Moreover, while FOMC of 12 members determines the main interest rate during the night, the governors alone set the discount price, they used to find the current value of the money, and the interest on the reserve balances, which drive banks to store their money at the Federal Reserve, and it is a type of handrail for boxes.
Finally, the Board of Directors controls the re -appointment in 12 regional bank presidents, with a large number of names in 2026.
Among these responsibilities is the role of the Federal Reserve in ensuring the safety of the treasury system and maintaining a stable dollar.
In other words, this is more than just a rate of September.
“I think the most dangerous danger is that people are able to trust in the Federal Reserve is what Trump is doing himself,” said Robert Hawkit, a professor at Cornell Law Faculty. “Because if Trump succeeds in this, it indicates that the Federal Reserve is nothing but a rubber seal. It mainly tells us that any nuts to enter the White House will put the monetary policy from now on.”
Hokit added that the influence is that “we can have the same type of excessive division in the future that Banana Republics in Latin America were classic was classic when their dictatorship developed a monetary policy, or that Turkey has witnessed in recent years because its dictator has set a monetary policy.”
What Trump wants to achieve
On the part of the administration, Trump’s Lieutenant says largely that they believe in the independence of the federal reserve, but they see that the central bank runs the Amok that needs to rule.
However, the President acknowledged that he would test a test Candidates for vacancies They are ready to reduce prices, in the past, he called for an opinion on the decisions of the Federal Reserve Average among other measures that can be considered interventions in the central bank’s area.
“I don’t think he is undermining the independence of the federal reserve. I only think this is the fact that the system needs to be re -evaluated and President Trump does things only from unconventional,” said Joseph Lavingna, a economist in the first period of Trump and now to Treasury Secretary Scott Bessent’s advisor. “Certainly, there was a crawling of the mission on behalf of the federal reserve in climate change, diversity, inclusion issues and things that certainly exceed their mandate.”
In fact, the idea that the Federal Reserve needs a comprehensive reform with support in Wall Street.
Mohamed El -Erian, the former CEO of Pimco and the chief economic advisor at Allianz, recently defended that Powell stepped down as head to avoid the type of battle around the independence that is now happening. Moreover, he said that the Federal Reserve Policy errors helped to expose the current battle.
“This is the exact world that I was concerned about,” Al -Arian said on Friday. “The federal reserve is weak on many different fronts, and I am now afraid that we have started walking this way to the point that I am really afraid.”
Among the reforms that Al -Aryan talks about taking it after the Bank of England and allowing “external members” to express the policy industry group “that brings the difference of difference and that helps reduce the risk of collective thinking.”
He also said that the Federal Reserve should reconsider the target of inflation by 2 %, which Powell repeatedly said it is not on the table.
End game
However, critics say what Trump is talking about goes beyond mere structural reforms.
“This is really a story about trying to retract 90 years of independence in the Federal Reserve,” said Roger Ferguson at CNBC. “The whole goal was to give the federal reserve independence to do this very important thing, which is to set a monetary policy. Now, for the first time, we see a direct effort to undermine this.”
The extent of Trump’s success in doing this is another issue.
Currently, he has two appointed, Christopher, Wald and Michel Bowman, on the blackboard. Stephen Miran is Waiting for the confirmation of the Senate To fill the seat by Adriana Kogler. If Powell leaves next May when his term is running out as a president, this would create another vacancy and give the president five seats.
However, relying on all these members as an automatic voice is risky.
Professor Cornell Hiquit said that both Walir and Bowman showed strong independent lines, as they were taking external positions and positions that exceed the circumstances, and they were unlikely to be “young for Trump.”
The judge, Professor of Colombia, added: “It is not fair to the rulers sitting, assuming that they are ready to work as partisan two parties.”
It is also possible to stand on the way a series of Court tests This will focus on whether Trump has a “reason” to remove cooking or anyone else.
Krishna Jh, head of the Central Bank Strategy at Evercore ISI, said if the president succeeds, he may have widespread effects on the economy and markets.
“We believe that the foundation line at this stage should be very large from the federal reserve until 2026 and – while this does not correspond automatically with a big step in politics and practice – we need to think seriously about the possibility that this will lead to a rupture with the previous practice and the function of a different reaction materially with important effects on the markets.”
The risks are also great for the future of the Federal Reserve as an institution.
“There was no threat to the independence of nutrition in our entire history, like a republic, as is the case now thanks to what Trump is doing,” said Hookite. “I think our long -term confidence in our central bank, and therefore in our currency will take another success.”
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