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If Trump succeeds in replacing Cook with someone he can control, the balance within the Federal Reserve could fundamentally change...
Donald Trump has taken an unprecedented step towards absolute control over the American economy: the attempt to dismiss Federal Reserve Governor Lisa Cook has shocked financial and legal circles in the US, signaling an authoritarian turn in how the former president intends to govern the economy if returned to power.
Trump ordered Cook's removal on charges of making false statements on a mortgage loan several years ago, a claim that has not been verified by any official investigation and that comes from a loyalist of his, Bill Pulte, appointed to the housing agency.
“This is no longer a free market economy, but a Russia or Turkey-style scenario,” a senior financial official told The Guardian.
Trump is centralizing everything
This is not the first time. Earlier this summer, Trump fired the head of the Bureau of Labor Statistics after the agency published inaccurate employment data. In her place, he appointed an unqualified but politically loyal figure – EJ Antony.
In the technology sector, Trump has entered into dubious agreements with giants Nvidia and AMD: allowing them to export to China in exchange for 15% of their revenue. A move that is more reminiscent of Soviet customs than American capitalism.
The power game within the central bank
Trump has already appointed some of his own people to the Fed's Board of Governors: Michelle Bowman, Stephen Miran and Christopher Waller, the latter of whom is seeking to advance to the top of the bank. If Cook is replaced by another Trump loyalist, the majority on the board will answer directly to the White House.
Jay Powell, the current Fed chairman and one of Trump's favorite targets of criticism ("a stubborn donkey"), would remain in the minority in the institution he leads.
Why is this alarming?
In February 2026, the Fed Board will decide on the leaders of all 12 of the bank's regional branches, a key step in securing long-term control of U.S. monetary policy. If Trump appoints them all, he would have the ability to directly influence interest rates, the dollar and movements on Wall Street for the next five years.
The ultimate goal: to control public debt and dominate the markets
Trump has made it clear: he wants interest rates to be cut despite inflationary pressure, to better manage the public debt that is reaching record levels. The idea is to "force" the Fed to buy government debt, creating money, a tactic once used only by authoritarian regimes or Italy in the 1970s.
If this political line is implemented, the US risks losing one of its strongest pillars: the independence of the central bank and the trust of international markets. /Adapted from "Corriere Della Sera"
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