WSJ What’s News Trump Pushes the Fed Into Uncharted Territory
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Aug 26, 2025 President Trump’s controversial decision to remove Federal Reserve governor Lisa Cook raises questions about the limits of presidential authority and the Fed's independence. Tensions are also high as U.S.-China trade negotiations resume. Meanwhile, Ukraine's drone strikes target Russian refineries, complicating the energy landscape in the ongoing conflict. The impact of these events on interest rates and market responses is scrutinized, alongside the surprising resurgence of print media amid digital fatigue.
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Trump Moves To Remove A Fed Governor
- President Trump announced he is removing Fed Governor Lisa Cook, claiming fraudulent mortgage information as cause.
- Alex Frangos says the move is legally possible but unprecedented and will test limits of Fed independence.
Legal Shield Meets Political Test
- The Supreme Court recently gave Fed appointees wide latitude against removal, but firing a governor has never been tested.
- Removing Cook would let Trump nominate a replacement but Senate confirmation and Fed voting dynamics limit immediate control.
Rate Cuts: Speed Over Direction
- Trump aims to pressure the Fed into deeper, faster rate cuts to aid his agenda.
- Markets note Powell is already opening the door to cuts, so the debate centers on speed and timing rather than direction.