FT News Briefing The risk of firing a central bank governor
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Aug 27, 2025 The podcast discusses concerns about the independence of the Federal Reserve following Trump’s attempt to fire a governor, and its potential impact on the U.S. economy. It also highlights the U.S. readiness to provide support for postwar Ukraine. Meanwhile, the French economy grapples with instability as a government collapse looms, causing significant turbulence in the markets. Political appointments are scrutinized for their effect on economic governance, creating a backdrop of uncertainty for investors.
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Firing Seen As Attack On Fed Independence
- Markets see Lisa Cook's firing attempt as part of a coordinated attack on Fed independence, not an isolated incident.
- Investors fear undermining the Fed will reduce inflation control and raise US borrowing costs.
Board Majority Would Reshape Fed Governance
- Removing Cook could let the president secure a majority on the seven-member Fed board and reshape governance.
- That majority matters because the board picks regional Fed presidents who influence interest-rate votes.
Legal Fight Likely To Reach Supreme Court
- No president has ever fired a Fed governor and 'gross malfeasance' is legally unclear in this context.
- The dispute will likely land in the Supreme Court, creating prolonged legal uncertainty.