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U.S. President Trump's Attempt to Dismiss Federal Reserve Governor Lisa Cook Raises Market Concerns

Updated: 2025-08-26 06:17 BST

Top Lines

U.S. President Donald Trump attempts to dismiss Federal Reserve Governor Lisa Cook, citing alleged mortgage improprieties.
Cook vows to remain in her position, challenging the legality of the dismissal.
Market reactions include declines in Asian equities and European and U.S. stock futures.

What Happened

On August 26, 2025, U.S. President Donald Trump announced his intention to dismiss Federal Reserve Governor Lisa Cook over alleged improprieties related to obtaining mortgage loans. Cook, whose term runs through 2038, has vowed to remain in her role, asserting that the president lacks the authority to remove her. This development has raised legal and political concerns regarding the independence of the Federal Reserve. (reuters.com)

Why It Matters

Market Impact: The announcement has led to declines in Asian equities and European and U.S. stock futures, indicating investor apprehension about potential disruptions in U.S. economic policy.
Legal and Political Implications: The move has sparked debates over the limits of presidential authority and the protection of central bank independence.
Federal Reserve Policy Expectations: Traders are now pricing in an 83% chance of a Federal Reserve interest rate reduction in September, reflecting uncertainty about future monetary policy.

Key Numbers / Facts

83%: Probability of a Federal Reserve interest rate reduction in September, as indicated by traders. (reuters.com)

Timeline (Today, 2025-08-26)

04:36 UTC: President Trump announces intention to dismiss Federal Reserve Governor Lisa Cook. (reuters.com)
04:36 UTC: Market reactions include declines in Asian equities and European and U.S. stock futures. (reuters.com)

Sources

Reuters – Morning Bid: Markets ask again of Trump: 'Can he do that?' — published/updated 2025-08-26 04:36 UTC