Bitcoin News Today: Trump Fires Fed Governor Lisa Cook Amid Legal Dispute and Power Struggle

President Donald Trump’s abrupt dismissal of Federal Reserve Governor Lisa Cook has intensified a high-stakes battle over the independence of the U.S. central bank, with significant implications for financial markets and U.S. economic credibility [1]. Declared “effective immediately” on August 19, 2025, the firing came amid allegations that Cook improperly claimed two homes as primary residences on mortgage applications in 2021, a claim she has denied and her legal team plans to contest in court [2]. The move has drawn sharp criticism from legal experts and lawmakers, who argue that Trump lacks the authority to remove a Fed governor absent a conviction or serious misconduct [3].

Trump’s decision is seen as part of a broader strategy to tilt the Fed’s board toward his policy preferences, particularly lower interest rates and a weaker dollar [8]. If successful, the removal would give Trump a majority on the board—a shift critics warn could erode the Fed’s institutional independence, a key pillar of U.S. financial stability. The Senate Banking Committee’s top Democrat, Elizabeth Warren, labeled the move an “authoritarian power grab,” while Senator Mark Warner emphasized the constitutional design of the Fed to remain free from political influence [7].

The markets have already reacted to the uncertainty. Global equities and cryptocurrencies dropped sharply, with Bitcoin plummeting nearly $4,000 in minutes as investors priced in concerns over political interference in monetary policy [6]. The U.S. dollar has weakened by 10.7% in 2025, reflecting broader skepticism about the Fed’s ability to maintain its credibility and autonomy [4]. Analysts have drawn comparisons to economies such as Turkey, where political manipulation of central banks has led to diminished trust and economic instability [1].

The legal challenges are expected to be protracted, with Jaret Seiberg of TD Cowen noting that the allegations against Cook may not meet the legal threshold for dismissal under the Federal Reserve Act [2]. Furthermore, concerns have been raised about the timing and targeting of the allegations, given that the mortgage applications occurred before Cook’s appointment to the Fed [2]. Her dismissal has been described as “reckless and illegal” by former Treasury official Graham Steele, who warned that such actions could undermine the U.S.’s global economic leadership [7].

Trump’s campaign to assert control over the Fed has been ongoing since the start of his second term. He has repeatedly criticized Fed Chair Jerome Powell and used various tactics—including scrutinizing the Fed’s headquarters construction costs—to pressure for a more dovish stance [8]. The removal of Cook, a key Democratic appointee and the first Black woman to serve on the Fed Board, is viewed as a strategic maneuver to reshape the board in favor of Trump-aligned appointees [7].

The broader concern is that if Trump’s actions are upheld, the precedent could weaken the long-standing tradition of central bank independence, which underpins confidence in U.S. financial markets and the dollar [3]. Analysts have suggested that in the short term, a weaker dollar and lower interest rates could drive investment into alternative assets like Bitcoin and Ethereum [1]. However, in the longer term, any erosion of trust in U.S. institutions could accelerate the shift toward decentralized financial systems [1].

Sources:

[1] TRUMP DECLARES WAR ON THE FED, SETTING UP A TITANIC STRUGGLE (https://www.aol.com/trump-declares-war-fed-setting-033207293.html)

[2] TRUMP SAYS HE’S FIRED FED GOVERNOR LISA COOK, IN MOVE TO CONTROL US CENTRAL BANK BOARD (https://www.morningstar.com/news/marketwatch/20250825353/trump-says-hes-fired-fed-governor-lisa-cook-in-move-to-control-us-central-bank-board)

[3] TRUMP FIRES FED GOV. LISA COOK 'EFFECTIVE IMMEDIATELY' (https://www.americanbanker.com/news/trump-fires-fed-gov-lisa-cook-effective-immediately)

[4] THE WEAKENING DOLLAR AND TRUMP'S FED INFLUENCE (https://www.ainvest.com/news/weakening-dollar-trump-fed-influence-implications-global-markets-strategic-assets-2508/)

[6] BITCOIN NEWS TODAY: TRUMP'S FED GAMBIT SPARKS LEGAL STORM (https://www.ainvest.com/news/bitcoin-news-today-trump-fed-gambit-sparks-legal-storm-market-panic-2508/)

[7] GOVERNOR LISA COOK FIRED: TRUMP TRIGGERS A FED SHOWDOWN LIKE NEVER BEFORE (https://www.businesstoday.in/world/us/story/governor-lisa-cook-fired-trump-triggers-a-fed-showdown-like-never-before-491024-2025-08-26)

[8] TRUMP WANTS CONTROL OF THE FED (https://politicalwire.com/2025/08/26/trump-wants-control-of-the-fed/)