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Sep 3, 2025  |  
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Lauren Hirsch


NextImg:Trump’s Fight with the Fed Carries a Heavy Cost, Experts Say
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ImageA person in a dark blue jacket shields his eyes with left hand as his head tilts upward towards a series of computer monitors.
See no evil?Credit...Michael M. Santiago/Getty Images

Andrew here. A lot has happened in the past week, but let’s focus on an especially serious situation: the fight between President Trump and Lisa Cook, the Fed governor. What many fail to recognize is that this isn’t just a skirmish over one person, but a broader effort to fundamentally reshape the central bank.

Trump said that he was seeking a “majority” on the Fed’s board. This suggests an explicit desire for more control over the central bank’s policy decisions than ever before. There may be an even bigger issue at play: The regional Fed presidents need to be reappointed in February, but if the president gains control of the Fed’s board, he could influence the selection of these regional leaders (who become rotating voting members every several years). That could install an entire generation of ideologically aligned policymakers.

Also, please take a listen to Tuesday’s episode of “The Daily.” I was invited on to speak about one of the other major stories of the moment: Trump’s decision to take a 10 percent stake in Intel and what it means for corporate America and the state of capitalism.

The Fed paradox

More prominent voices, including Christine Lagarde of the European Central Bank and the billionaire financier Ray Dalio, have warned about the dangers from President Trump’s all-out assault on the Fed.

And yet as U.S. stocks hover near a new high, equity investors seem unperturbed.

The S&P 500 notched its fourth-straight month of gains in August despite worries about tariffs’ effects on inflation and consumer spending — and concerns that Trump could bulldoze the sanctity of Fed independence.

What to watch:

  • Trump is a step closer to putting an ally, his economic adviser Stephen Miran, on the Fed. A Senate hearing on Miran’s nomination as a governor is scheduled for Thursday, as the White House aims to get him confirmed in time for the Fed’s rate-setting meeting in two weeks.

  • A federal judge has asked lawyers for Lisa Cook, the Fed governor whom Trump is trying to fire, to file more briefs on Tuesday as she pushes back against the president. The case, which hinges on the question of presidential authority over the central bank, is expected to end up in the Supreme Court.

Are stock investors missing the forest for the trees? Dalio told The Financial Times that with Washington running huge budget deficits, a strong and independent Fed was hugely important.


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