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<\/p>\n Email Link<\/p>\n \n Donald Trump did exactly what he said he\u2019d do.\n <\/p>\n \n There was no weekslong debate in the West Wing, no careful coordination with congressional allies, no intensive staff presentations detailing arcane legal authorities. There was just a social media post from the president suggesting a Federal Reserve governor should resign and then, a few days later, another one announcing she\u2019d been fired<\/a>.\n <\/p>\n \n In interviews with more than a dozen Trump administration officials across Washington and Republican lawmakers back home in the final days of their August recess, they all shared a similar refrain in the hours after Trump moved to terminate a Federal Reserve governor for the first time in history: They had no idea it was coming.\n <\/p>\n \n But several Trump officials suggested the signs were obvious. Just days earlier, the president had pledged to reporters that he\u2019d fire Federal Reserve Governor Lisa Cook if she didn\u2019t resign over allegations of mortgage fraud.\n <\/p>\n \n \u201cThe president said he\u2019d do this if she didn\u2019t resign,\u201d said a Trump administration official. \u201cWell, she didn\u2019t resign.\u201d\n <\/p>\n \n \u201cThe president is a man who sticks to his word,\u201d a second Trump official told CNN.\n <\/p>\n \n Cook has denied the fraud allegations and vowed to fight<\/a> in the courts. Cook and her attorney, Abbe Lowell, have argued the unproven accusations against her do not justify sufficient cause for her firing.\n <\/p>\n \n The White House, however, argues Trump was well within his legal bounds to oust her.\n <\/p>\n \n \u201cThe president absolutely has the authority to fire a fed governor for cause, and I think the accusations are serious,\u201d White House Director of the National Economic Council Kevin Hassett told reporters Wednesday morning. He added that Cook should be placed on leave until the accusations are resolved.\n <\/p>\n \n \u201cThe fact that she is not doing that suggests that she is partisan and is trying to make a partisan stance, which is contrary to the independence of the Fed.\u201d\n <\/p>\n \n Trump\u2019s Truth Social post just after 8 p.m. Monday night announcing he\u2019d fired Cook sets the stage for a historic legal showdown that could determine whether the century-old central bank retains its independence from the White House.\n <\/p>\n \n It also capped what multiple Trump officials have described as a remarkable sequence of events that led to the moment, beginning on August 1 with the arrival of a resignation letter addressed to Trump from another Biden-appointee to the Federal Reserve Board nearly six months before the end of her term.\n <\/p>\n \n Adriana Kugler\u2019s decision to leave the Fed, which was announced publicly a few hours later that Friday afternoon, came as a surprise within the Fed and inside the West Wing, three people familiar with the matter said. Trump was thrilled, one said.\n <\/p>\n \n The open seat created an immediate chance for Trump to add an ally to the Fed\u2019s seven-member Board of Governors ahead of a critical meeting next month in which the board will vote on whether to lower interest rates \u2014 a move Trump has made plain he wants.\n <\/p>\n \n Within a week, Trump selected Stephen Miran, his chief economist and the intellectual architect of his tariff strategy who has echoed his view that the Fed should cut rates.\n <\/p>\n \n Meanwhile, a Trump official<\/a> at an obscure federal housing agency began sharing directly with the president accusations that Cook had committed mortgage fraud, a source familiar with the move told CNN \u2014 creating a potential legal basis to justify Cook\u2019s removal.\n <\/p>\n \n Suddenly, Trump had the chance to fill not one but two extra seats on the board, giving him a potential 4-3 majority and a path to do to the Fed what he\u2019s done to other government institutions over the past several months \u2014 bend it to his will. And all of this without firing Fed Chairman Jerome Powell, a consistent target<\/a> of Trump\u2019s ire in recent months.\n <\/p>\n \n Discussions with a small group of his closest advisors, some of whom made the case that the legal authority was clear, as were the allegations against Cook, created an opportunity for Trump to take action.\n <\/p>\n \n He decided to fire Cook, just like he said publicly he would.\n <\/p>\n \n Trump\u2019s consultations included Treasury Secretary Scott Bessent, widely viewed as the most powerful of Trump\u2019s economic advisors<\/a> and, at least so far, as a stabilizing influence in a White House bent on disruption. Bessent has long sought to reassure markets about the administration\u2019s belief in the importance of Fed independence \u2014 despite Trump\u2019s long-running pressure campaign.\n <\/p>\n \n Trump has told advisors he wants to move quickly to appoint a replacement for Cook, Trump administration officials told CNN, and at a lengthy Cabinet meeting on Tuesday proceeded to publicly acknowledge the primary reason for his decision to fire Cook.\n <\/p>\n \n \u201cWe\u2019ll have a majority very shortly, so that\u2019ll be great,\u201d Trump said. \u201cOnce we have a majority, housing is going to swing and it\u2019s going to be great. People are paying too high an interest rate.\u201d\n <\/p>\n \n Seated around the large table on Tuesday was Bessent, who, without naming Cook, made an unsolicited attempt to justify the decision to fire her.\n <\/p>\n \n \u201cThe Federal Reserve\u2019s independence comes from a political arrangement between itself and the American public. Having the public\u2019s trust is the only thing that gives it credibility,\u201d Bessent said. \u201cAnd you sir, are restoring trust to government.\u201d\n <\/p>\n \n \u201cThe President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,\u201d White House spokesman Kush Desai told CNN in a statement.\n <\/p>\n \n Meanwhile, Senate Republicans, many of whom have spoken publicly and often about their belief in an independent Fed, can blow up Trump\u2019s entire plan if they don\u2019t confirm his nominees and, should the courts side with the administration, the seat held by Cook.\n <\/p>\n \n The first test will play out as soon as next week, when Miran is likely to have his confirmation hearing.\n <\/p>\n \n Trump\u2019s aides have quietly been laying the groundwork for weeks to ensure an accelerated confirmation process in an effort to get Miran in place before the Federal Open Market Committee\u2019s next policy meeting begins on September 16.\n <\/p>\n \n People close to Trump told CNN that, unlike during his first term when he was surrounded by advisers who held him back, he is more emboldened than ever to push the bounds of his executive authority \u2014 especially on issues where he views the end result to be worth it.\n <\/p>\n \n Forcing out a high-ranking member of the Federal Reserve, specifically one facing allegations of mortgage fraud, meets that requirement, they argued, even if the allegations are still unproven. In conversations with multiple Trump administration officials and allies of the president, they said the underlying reason for Trump\u2019s fixation with the Federal Reserve boils down to a key point: he views their decisions as being a roadblock to achieving his broader vision of success. And the fact that the independent bank operates wholly out of his control only adds fuel to that fire.\n <\/p>\n \n But the controversial decision did not happen in a vacuum. It came after months of Trump\u2019s dissatisfaction with his inability to address an issue he views as core to fulfilling a key campaign promise: ensuring a thriving economy.\n <\/p>\n \n Trump\u2019s fixation on ousting Cook also grew out of the work of Bill Pulte, the director of the Federal Housing Finance Agency, who has spent weeks fueling Trump\u2019s exasperation with the Fed.\n <\/p>\n \n Along with taking his mortgage fraud accusations about Cook directly to Trump, Pulte also made the allegations public on social media and television \u2014 creating a potential legal basis to justify Trump\u2019s eventual decision to fire her.\n <\/p>\n \n The accusations mirror similar allegations<\/a> lobbed by Pulte at other perceived political foes. He has called for mortgage fraud investigations into Democratic Sen. Adam Schiff of California and New York Attorney General Letitia James.\n <\/p>\n \n In a statement, Schiff\u2019s attorney, Preet Bharara, called the mortgage fraud investigation<\/a> \u201cthe very definition of weaponization of the justice process.\u201d Lowell, who also represents James, said the investigation<\/a> against her was \u201cthe most blatant and desperate example of this administration\u2019s carrying out the president\u2019s political retribution campaign.\u201d\n <\/p>\n
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