U.S. President Donald Trump's abrupt dismissal of Federal Reserve Governor Lisa Cook sent shockwaves through global markets this week, with Asian stocks and Dow Futures sliding amid renewed concerns about political interference in monetary policy. The unprecedented move – citing alleged discrepancies in Cook's 2021 mortgage applications – marks the first removal of a sitting Fed governor in modern history.
In a sharply worded letter to Cook, the first African-American woman on the Fed's governing board, Trump claimed "sufficient cause" for termination related to residency claims on two properties. Cook, appointed by former President Joe Biden in 2022, countered through legal counsel that the president lacks authority to remove her under existing laws governing Fed appointments.
"No causes exist under the law, and he has no authority," Cook stated, vowing to continue her economic stabilization efforts. The controversy comes as Trump renews threats of tariffs and microchip export controls, compounding investor anxiety.
Market analysts noted immediate ripple effects, with Japan's Nikkei falling 1.2% and Hong Kong's Hang Seng dropping 0.8% during Tuesday's session. The Wall Street Journal reported heightened concerns about Fed independence potentially affecting long-term dollar stability.
This development follows a pattern of Trump targeting political figures through financial scrutiny, including recent fraud allegations against U.S. Senator Adam Schiff. Legal experts warn the dismissal could trigger constitutional challenges testing presidential authority over independent agencies.
