Trump seeks to fire Cook again, reported to be in close contact with Walsh; the independence of the Federal Reserve faces new tests

According to the Zhitong Finance APP, the White House stated this week that U.S. President Donald Trump is "considering" firing Federal Reserve Governor Lisa Cook. This move marks Trump's renewed attempt to initiate the removal process for the Biden-appointed governor after the U.S. Supreme Court temporarily blocked his dismissal order in June. Meanwhile, reports indicate that Trump has had multiple conversations with Kevin Warsh since he was confirmed by the Senate as Federal Reserve Chairman in May. The independence of the Federal Reserve is facing unprecedented challenges.

Dan Scavino, a presidential assistant at the White House, stated in a letter to Cook on Wednesday that there is "ample reason to believe" that Cook made false statements in one or more mortgage agreements. This allegation is similar to the reasons Trump and his allies initially attempted to fire Cook last year. Cook has denied these allegations and has filed a lawsuit regarding her dismissal.

During the litigation, a U.S. federal court blocked Trump's decision to fire Cook. The U.S. Supreme Court upheld this ruling with a 5-4 vote at the end of June, rejecting Trump's request to "stay the lower federal court ruling." This decision is seen as a defense of the Federal Reserve's cherished independence amid unprecedented challenges.

However, Chief Justice John Roberts pointed out that the court's ruling did not prevent Trump from attempting to fire Cook again on the grounds of mortgage fraud allegations. Roberts stated that any new attempt to dismiss Cook would require additional measures to protect her constitutional due process rights.

Scavino indicated that he sent this letter on Wednesday "based on the Supreme Court's opinion" and requested Cook to submit an explanation and relevant evidence within three weeks.

Cook's attorney, Abbe Lowell, immediately issued a statement, directly stating that these allegations "are as baseless as President Trump's attempt to remove Cook and interfere with the independence of the Federal Reserve a year ago." Lowell emphasized: "Regardless of what action the president takes next, the facts and Supreme Court precedents are clear—there is no legal basis for removing Cook from her position. We will, as before, challenge this latest excuse to defend her position and the historic role of the Federal Reserve."

Cook was appointed by former President Biden in 2022, with a term lasting until 2038. Trump's initial attempt to fire Cook coincided with his increased pressure on the Federal Reserve, demanding significant interest rate cuts, raising widespread concerns that this could set a dangerous precedent, exposing monetary policy decisions to more political interference risks. Notably, since the Federal Reserve's establishment in 1913, no U.S. president has successfully removed a Federal Reserve governor.

Meanwhile, the frequent private conversations between Trump and Federal Reserve Chairman Kevin Warsh are raising new doubts about the independence of the Federal Reserve.

Media reports on Wednesday indicated that since Warsh was confirmed by the Senate in May, the two have had multiple conversations covering topics such as the impact of the Iran war on the economy and the rapid rise of artificial intelligence. This communication pattern breaks the recent norm of formal and limited contact between the president and the Federal Reserve chairman.

It remains unclear whether the two discussed monetary policy, but Trump has long called for significant interest rate cuts from the Federal Reserve. Trump's actions to influence monetary policy represent the most aggressive intervention in central bank decision-making in decades The non-farm payroll data released by the United States on Friday fell short of expectations, reducing the market's bets on the Federal Reserve tightening monetary policy. Traders currently estimate the probability of the Federal Reserve raising interest rates next month at around 40%, significantly lower than the approximately 60% before the report was released