Trump's dismissal of Federal Reserve Board member Cook over "old grievances" is essentially a brutal violation of central bank independence. It not only goes against the principle of "just cause" as stated in the Federal Reserve Act but also sets a dangerous precedent of prioritizing personal morals over professional qualifications.
The core objective is glaringly obvious: Cook is a key figure in stabilizing interest rates at the Federal Reserve, which contradicts Trump's demands for "pressure to lower interest rates." The dismissal is merely a guise of "accountability," acting as a pretext for a "purge" to pave the way for inserting loyalists and controlling monetary policy—upon the news, the dollar immediately fell by 0.3%, and the market's panic over the Federal Reserve's credibility is evident.
More critically, this is a step in Trump's systematic dismantling of the Federal Reserve's institution: since returning to the White House, he has already stacked 4 "doves" on the board. If this dismissal goes through, the Federal Reserve will completely become a tool of the White House. At that point, not only will the foundation of the dollar as a reserve currency be shaken, but it will also exacerbate capital outflows from emerging markets, undermine global monetary policy coordination, and ultimately, for the sake of short-term electoral gains, overdraw decades of accumulated financial hegemony in the United States.
