Trump Fires Federal Reserve Governor, Markets Fall

President Donald Trump has fired Lisa Cook, a Federal Reserve governor, in a highly unusual move that challenges the independence of the U.S. central bank. Trump accused Cook of mortgage fraud based on allegations by a Trump appointee, but Cook has stated she will not resign, asserting Trump lacks the authority to remove her. This action has unsettled financial markets, causing declines in the U.S. dollar, long-term Treasury yields, and global stock markets, while increasing speculation about a potential Fed rate cut in September. Trump's ongoing pressure on the Federal Reserve, including threats against Chair Jerome Powell over interest rate policies, has raised concerns about political interference in monetary policy, which could undermine investor confidence and trigger capital outflows from U.S. assets. Economists and market observers warn that eroding the Fed's independence risks destabilizing economic management, as the central bank's ability to adjust interest rates is critical to controlling inflation and supporting growth. Despite Trump's stated aim to restore public confidence in Federal Reserve governance, critics see this firing as a serious threat to the institution's credibility and market stability.