President Donald Trump announced late Monday that he was firing Federal Reserve Governor Lisa Cook, a Senate-confirmed appointee. This unprecedented action, citing unproven allegations of mortgage fraud, represents a direct undermining of the Federal Reserve’s long-cherished independence—a principle essential for managing the U.S. economy without political interference.

Now, investors are left grappling with the implications of this escalation, which could erode trust in America’s financial bedrock and exacerbate economic stagnation amid soaring deficits and national debt. This firing isn't just about one governor; it's a stark warning to the entire Fed board, including Chairman Jerome Powell, whom Trump has repeatedly threatened in recent months.

By crossing this line, Trump risks politicizing monetary policy at a time when the economy demands impartial decision-making.

The Fed, established in 1913, plays a pivotal role in steering the U.S. economy through tools like interest rate adjustments to combat inflation and foster growth. Its independence from political pressures is not merely a tradition but a legal safeguard enshrined in the Federal Reserve Act, which allows the president to remove governors only "for cause"—a term that has never been tested in this context until now.

This autonomy is the foundation of global trust in U.S. financial markets. Bond buyers and investors rely on the Fed’s ability to act without........

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