President Donald Trump has removed Lisa Cook, a Federal Reserve Governor, effective immediately, citing a “criminal referral” from Federal Housing Finance Agency Director William Pulte alleging mortgage fraud. The removal, communicated through a letter posted on Truth Social, raises significant questions about the independence of the central bank. The Federal Reserve Act stipulates that removal of governors is only permissible “for cause,” typically involving misconduct, and no charges have yet been filed against Cook. The move could lead to a legal challenge, given the Supreme Court’s past ruling that the Federal Reserve is a “uniquely structured, quasi-private entity” with a distinct historical tradition. Critics, including Sen. Elizabeth Warren, have condemned the action as an “authoritarian power grab,” potentially violating the spirit of the Federal Reserve Act [1].
Cook, who was appointed by President Joe Biden and holds a permanent vote on the Fed’s rate-setting committee, has faced increasing scrutiny from Trump and his administration. Her removal would allow Trump another opportunity to influence the central bank’s composition, particularly as he has already nominated Stephen Miran to the board and plans to appoint a new chair when Jerome Powell’s term ends in May. Trump has also previously appointed Fed governors Michelle Bowman and Christopher Waller. Despite these moves, the Fed’s decision-making power remains largely in the hands of the 12-member committee, where Trump’s appointees still constitute a minority. The political pressure on the central bank underscores a broader ideological clash over monetary policy, with Trump and his allies repeatedly criticizing the Fed for maintaining high interest rates [2].
The implications of the removal extend beyond the political sphere, affecting the perception of the U.S. dollar and financial markets. The U.S. Dollar Index dropped sharply following Trump’s announcement, signaling a potential erosion of confidence in the currency. The Fed’s independence, long considered a cornerstone of its credibility, is now under renewed scrutiny. If the removal is challenged in court, it may set a legal precedent with far-reaching consequences for how presidential authority interacts with independent agencies [1].
Meanwhile, Bitcoin (BTC-USD) has faced significant headwinds, currently trading near $114,000 as it tests a crucial support level. The cryptocurrency initially surged above $117,300 following Federal Reserve Chair Jerome Powell’s dovish comments at the Jackson Hole symposium, which hinted at potential rate cuts. However, the rally quickly faded, with the coin failing to break through the $117,000 resistance level. Technical indicators such as the Relative Strength Index, MACD, and Commodity Channel Index suggest weak momentum, while institutional buying has declined sharply, dropping from 174,000 BTC in July to just 59,000 BTC. On-chain data also reveals aggressive profit-taking by whale investors, further contributing to the consolidation phase [3].
The broader cryptocurrency market has also shown signs of shifting capital flows. Bitcoin dominance has slipped to 59 percent as traders rotate into alternative cryptocurrencies, particularly Ethereum, which recently broke above $4,800. Spot Bitcoin ETFs, once a primary driver of demand, have seen minimal inflows, with only 11,000 BTC in 30-day net inflows, the lowest since April. The fee market has weakened significantly, with Bitcoin network fees hitting their lowest levels since 2011. This decline is attributed to improved efficiency from SegWit and Lightning adoption, as well as reduced speculative activity in NFTs and DeFi. Miners now rely more heavily on block subsidies, signaling a potential long-term structural shift in the network’s economics [3].
Looking ahead, analysts caution that Bitcoin remains vulnerable below $117,000, with the next key support level at $111,000 if the $114,000 level breaks. The 200-day simple moving average near $100,800 provides a potential floor, and any sustained move above $117,000 could pave the way toward $121,000 to $127,000. While institutional adoption continues, albeit at a slower pace, the near-term outlook remains bearish. In the medium term, cautious accumulation is advised if Bitcoin sustains levels above $110,000. Over the next six to twelve months, the bull case remains intact, particularly if macroeconomic catalysts like Federal Reserve rate cuts align with renewed institutional inflows [3].
Source:
[1] Trump removing Federal Reserve Governor Lisa Cook (https://www.nbcnews.com/politics/white-house/trump-removing-federal-reserve-governor-lisa-cook-rcna227138)
[2] Trump says he has fired Fed governor Lisa Cook. She … (https://www.cnn.com/2025/08/25/business/trump-fire-fed-governor)
[3] Bitcoin Price Forecast: BTC-USD Holds $114K, Eyes $117K … (https://www.tradingnews.com/news/bitcoin-price-forecast-btc-usd-struggles-at-117k-usd-ressitance-whule-whales-lock-in-profit)
