August 26, 2025

Lisa Cook is fighting Trump’s attempt to fire her:

Federal Reserve Governor Lisa Cook’s attorney, Abbe Lowell, announced on Tuesday he is filing a lawsuit to challenge President Donald Trump’s attempt to fire her on Monday evening.

“President Trump has no authority to remove Federal Reserve Governor Lisa Cook. His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” he said in a statement sent to CNN.

Matt Egan at CNN puts Trump in dubious company:

In 1970, President Richard Nixon tapped Arthur Burns, one of his top economic aides, to lead the Fed.

Even though Burns was known as an inflation fighter, historians say Nixon successfully pressured his handpicked Fed chief to juice the economy with low rates to boost his political fortunes.

A review of telephone conversations “clearly reveals that President Nixon pressured Burns, both directly and indirectly…to engage in expansionary monetary policies prior to the 1972 election,” according to a 2006 paper published in the Journal of Economic Perspectives. “Richard Nixon demanded and Arthur Burns supplied an expansionary monetary policy and a growing economy in the run-up to the 1972 election.”
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More recently, Turkish President Tayyip Erdogan fired his country’s central bank chief in 2021 and installed a loyalist. As the Turkish central bank slashed interest rates at Erdogan’s behest, the Turkish lira crashed and inflation blew past 80%.

To my surprise, markets yawned at the impending tussle:

Canada’s main stock index closed up on Tuesday as strong bank earnings and higher gold prices helped boost shares, even as oil prices slid and concerns deepened about the U.S. Federal Reserve’s independence. Wall Street also ended higher.
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The index also benefited from gold prices, which rose to a more than two-week high as investors took refuge in safe-haven yellow metal after fears that U.S. President Donald Trump would infringe on the independence of the Federal Reserve.

Trump fired Fed Governor Lisa Cook over alleged improprieties in obtaining mortgage loans. Spot gold was trading at 3,390.52 per ounce, up 0.71% at 4:13 p.m. ET, which lifted the mining-companies-tracker materials index, with almost 12.5% weight on the TSX, up 1.41% at market close.
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The U.S. two-year Treasury yield, which closely tracks expectations for Fed action, slipped to 3.68% from 3.73% late Monday.