U.S. President Trump announced the firing of Federal Reserve Governor Lisa Cook, raising questions about the stability of the dollar.
On Tuesday, the White House announced Trump's signed decision in a statement, claiming that Cook made false statements on certain mortgage agreements, thus relieving her of her duties. Trump directly wrote:
"I believe that faithful execution of the law requires your immediate removal from office."
Cook stated she would not resign and claimed that Trump had no authority to remove her from office and had no legal basis to do so.
The independence of the Federal Reserve is crucial
The Federal Reserve enjoys a significant degree of independence within the U.S. government. Alex Obchakevich, founder of the Obchakevich Institute, points out that this independence is the foundation of U.S. economic stability, ensuring that policy is not influenced by politics.
"Without change, the dollar may become unstable, potentially threatening its reserve currency status."
He believes that Trump fired Cook for political reasons, which undermines the independence of the Federal Reserve and creates market uncertainty.
When asked whether Bitcoin (BTC) could be a potential solution, Obchakevich stated that in the long term, Bitcoin could undermine the dollar's reserve status, but it is unrealistic in the short term.
Trump's Conflict with the Federal Reserve
This news is part of the ongoing conflict between Trump and the Federal Reserve leadership. In April this year, Trump criticized Federal Reserve Chairman Powell for being too slow to cut interest rates and suggested firing Powell, but market participants opposed this move.
U.S. Senator Elizabeth Warren warned that firing Powell could undermine investor confidence and lead to a financial crisis.
