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

The White House stated this week that U.S. President Donald Trump is "considering" firing Federal Reserve Board member Lisa Cook, marking a renewed effort by Trump to initiate her ouster following the U.S. Supreme Court's temporary halt to his dismissal order in June. Reports also indicate that Trump has spoken multiple times with Kevin Warsh since he was confirmed by the Senate as Federal Reserve Chair in May. The independence of the Federal Reserve is facing unprecedented challenges. Dan Scavino, a presidential assistant, indicated in a letter to Cook on Wednesday that there are "ample reasons to believe" Cook made false statements in one or more mortgage agreements. This allegation mirrors the justification Trump and his allies used last year in their initial attempt to fire Cook. Cook has denied these allegations and has filed a lawsuit in response to her potential ouster. During the ongoing lawsuit, a U.S. federal court halted Trump's decision to fire Cook. The U.S. Supreme Court upheld this ruling with a 5-4 vote at the end of June, dismissing Trump's request to "stay the lower federal court ruling." This decision is seen as a defense of the highly valued independence of the Federal Reserve during unprecedented challenges. However, Chief Justice John Roberts noted that the court's ruling does not prevent Trump from attempting again to fire Cook based on the mortgage fraud allegations. Roberts stated that any new attempt to dismiss Cook would require additional measures to protect her constitutional due process rights. Scavino stated that he sent the letter on Wednesday "based on the Supreme Court's opinion," and requested that Cook provide an explanation and relevant evidence within three weeks. Cook's attorney, Abbe Lowell, subsequently issued a statement, directly asserting that these allegations "are as baseless as those made a year ago when President Trump attempted to remove Cook and interfere with the Federal Reserve's independence." Lowell emphasized: "Regardless of what action the president takes next, the facts and the Supreme Court's precedents are clearthere is no legal basis for removing Cook from her board position. We will, as before, challenge this latest pretext 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 increasing pressure on the Federal Reserve, demanding significant interest rate cuts, raising widespread market concerns that such actions could set a dangerous precedent, leading to more political interference in monetary policy decisions. Notably, no U.S. president has successfully removed a Federal Reserve board member since the institution's founding in 1913. Meanwhile, the frequent private calls between Trump and Federal Reserve Chair Kevin Warsh are raising new doubts about the Federal Reserve's independence. Media reports on Wednesday indicated that since Warsh was confirmed by the Senate in May, the two have had several conversations covering topics such as the impact of the Iran War on the economy and the rapid rise of artificial intelligence. This mode of communication breaks with the recent tradition of maintaining formal and limited contact between the president and the Federal Reserve chair. It remains unclear whether monetary policy has been discussed between the two, but Trump has long called for significant interest rate cuts by the Federal Reserve. Trump's attempts to influence monetary policy represent one of the most aggressive interferences in central bank decision-making in decades. U.S. non-farm payroll data released on Friday fell short of expectations, reducing market bets on the Federal Reserve tightening monetary policy. Traders currently estimate the likelihood of the Federal Reserve raising interest rates next month at about 40%, down significantly from roughly 60% prior to the report's release.