Historical first! Trump "fires" current Federal Reserve governor, "mastering the Federal Reserve" plan takes another step forward

Trump has just made a significant move! He announced on social media that he is removing Federal Reserve Governor Lisa Cook from her position "effective immediately." This unprecedented action has shaken the financial markets, raising doubts. U.S. stock index futures fell in response, with the Nasdaq 100 index contract down 0.2%, and risk aversion pushed the yen up against the dollar, while gold recovered some earlier losses. If Trump's move is successful, it will bring him one step closer to "gaining control of the Federal Reserve." If Cook leaves, it will allow Trump to potentially gain four seats, giving him a majority on the seven-member board. Trump has already appointed two of the current governors during his first term and recently nominated his economic advisory council chairman Stephen Miran to fill the third seat vacated by Biden appointee Adriana Kugler. In a recent article, Wall Street Journal reporter Nick Timiraos, known as the "New Federal Reserve Correspondent," analyzed that Trump has already appointed two members to the Federal Reserve's seven-member board. If he gains two more nominated seats, he will have a majority, potentially fundamentally reshaping the entire Federal Reserve system. According to Timiraos' analysis, if Trump secures a majority on the Federal Reserve board before March next year, they may refuse to reappoint regional Federal Reserve presidents, thereby gaining control over the FOMC meetings. Unprecedented Dismissal Shakes Wall Street In his letter, Trump accused Cook of "fraudulent and potentially criminal behavior" in financial matters, claiming such actions have undermined her credibility as a regulator. The letter cites relevant provisions of Article II of the U.S. Constitution and the Federal Reserve Act enacted in 1913, with Trump stating that he has determined there is sufficient reason to remove Cook from her position. The letter mentions a criminal referral submitted by the Federal Housing Finance Agency on August 15, alleging that Cook made false statements in mortgage documents. For example, she first declared a property as her primary residence in a Michigan document and then made the same declaration in another document in Georgia. Trump called this "unimaginable," questioning her integrity and competence as a financial regulator. Trump's threat to dismiss Cook marks a significant escalation in the White House's pressure on the Federal Reserve. If Trump successfully removes Cook, it will set a historical precedent in the U.S.—no sitting Federal Reserve governor has ever been dismissed by a president before. The market is concerned this could trigger a constitutional crisis and exacerbate market turmoil In previous political conflicts, even the fierce confrontation between President Johnson and Federal Reserve Chairman William McChesney Martin, or President Nixon's pressure on Arthur Burns, did not result in any actual dismissal actions. Claudia Sahm, Chief Economist at New Century Advisors and former Federal Reserve economist, stated, "This is a new tactic by this administration to control the Federal Reserve, and they are using all means available to achieve this control." Does the President have the power to dismiss Federal Reserve Board members? Yes, but with conditions Legal experts emphasize that the Federal Reserve Act clearly states that Board members "may be removed by the President for cause," but this requires solid evidence of misconduct, such as neglect, malfeasance, or inability to perform duties, rather than political motives. Although Bill Pulte, Director of the Federal Housing Finance Agency (FHFA), previously accused Cook of lying in loan applications to obtain better terms, which constitutes mortgage fraud. However, the allegations against Cook have not yet been confirmed by the courts, and the Department of Justice has only stated that it will investigate the relevant allegations. Previously, Trump posted a photo of Cook marked with a red cross on his social media platform Truth Social, calling her a "fraudster." Cook is the first Black woman on the Federal Reserve Board, having joined in 2022. Massachusetts Senator Elizabeth Warren condemned Trump's actions on social media as "illegal and politically motivated." Trump's "three-step method" to control the Federal Reserve is gradually being implemented Some analysts believe that if Cook leaves, Trump will have the opportunity to appoint a fourth Federal Reserve Board member, gaining a majority on the seven-member board. Trump has already appointed two of the current board members during his first term and recently nominated his economic advisory committee chairman Stephen Miran to fill the third seat vacated early by Biden's appointee Adriana Kugler. On August 24, Nick Timiraos, a journalist from The Wall Street Journal, known as the "new Federal Reserve news agency," analyzed in a recent article that Trump has already appointed two members to the seven-member Federal Reserve Board. If he gains two more nominated seats, he will achieve a majority, potentially fundamentally reshaping the entire Federal Reserve system. Additionally, Timiraos analyzed that if Trump gains a majority on the Federal Reserve Board before March next year, they may refuse to reappoint regional Federal Reserve presidents. Dismissing those who are performing their duties would break decades of precedent and breach a key firewall that has protected its independence since the Federal Reserve was established in 1913