Trump has taken the case to dismiss Cook to the Supreme Court, and the independence of the Fed faces a historic challenge.

The Fed announced a 25 basis point rate cut on September 17, marking its first rate cut since December 2024. Although inflation has risen and remained at a slightly elevated level, new job additions have fallen far below expectations in recent months, prompting the Fed to take action.

At the same time, the Trump administration is seeking to overturn a lower court ruling that blocked the dismissal of Fed board member Lisa Cook. This move could allow Trump to control four of the seven Fed board seats, gaining a majority and significantly influencing the direction of monetary policy.

01 Supreme Court Showdown: Trump's Latest Efforts to Oust Cook

The Trump administration has escalated the legal battle to dismiss Fed Board member Cook to the Supreme Court on September 19. The Department of Justice submitted a petition on behalf of the President, requesting the Supreme Court to urgently issue a "stay order" allowing for Cook's immediate dismissal before the final ruling of the case.

Deputy Attorney General D. John Sole claims in the document that the court should not intervene in the President's power to remove based on "cause" and states that the President's determination of the reasons for removal "is not subject to judicial review."

This action took place one day after the Fed's September policy meeting announced a 25 basis point rate cut. Cook voted in favor of the rate cut at the meeting, continuing to fulfill his duties as a director.

02 Legal Game Journey: From Local Court to Supreme Court

The starting point of this legal battle is August 25, 2025, when Trump sent a letter of dismissal to Cook on the grounds of alleged mortgage fraud. The accusations involve Cook making false statements in mortgage documents in 2021 to obtain more favorable loan terms.

On August 28, Cook filed a lawsuit, claiming that the President's decision was illegal and requesting the court to block the dismissal. On September 9, the federal district court supported Cook, temporarily reinstating her position so that she could participate in this week's Fed interest rate meeting.

On September 16, the federal appeals court ruled 2:1 to uphold the district court's decision, allowing Cook to continue her duties during the case proceedings. The appeals court found that Cook's due process rights were violated, as the government did not provide her an opportunity to formally respond to the allegations.

03 Fed Rate Cut Decision: Divergence in Monetary Policy

Against the backdrop of the legal battle over Cook's dismissal, the Fed announced a 25 basis point rate cut on September 17, lowering the target range for the federal funds rate to between 4.00% and 4.25%.

The committee passed the decision to cut interest rates with a result of 11 votes in favor and 1 against. The only dissenting vote came from the newly appointed member Stephen Milan, who advocated for a cut of 50 basis points.

The Fed's forecast indicates that there will be a further rate cut of 50 basis points by the end of the year, with an additional cut of 25 basis points each year for the next two years. Policymakers expect the GDP growth rate to be 1.6% in 2025, up from the 1.4% predicted in June.

04 Power Balance: Trump Seeks Control of the Fed

Trump's attempt to fire Cook is seen as part of his pursuit of greater control over the Fed. Trump has stated that they "will soon have a majority of seats on the Fed."

If Trump successfully removes Cook and appoints a successor, he will control four of the seven Fed governors, gaining a majority and thereby deeply influencing the direction of monetary policy.

Trump's criticism of the Fed is not directed at Cook alone. Since taking office in January this year, he has continuously pressured the Fed to cut interest rates. Even after the Fed announced a rate cut, he continued his efforts to push for Cook's dismissal.

05 Market Impact: Interest Rate Cuts Boost Cryptocurrency Market

The Fed's interest rate cut decision had a direct impact on the financial markets, especially the cryptocurrency market. Bitcoin's price broke through $117,000, while altcoins also recorded significant gains.

The price of BNB has performed particularly well, once reaching a historic high of 1000 dollars. The strong performance of BNB is attributed to its deflationary model and the prosperous development of its ecosystem.

The Fed's interest rate cuts typically reduce the attractiveness of traditional yield-bearing assets, prompting investors to seek higher-return alternatives such as stocks and cryptocurrencies. However, the market's response to the rate cuts has been relatively mild, indicating that investors have largely priced in this expectation.

06 Historical Significance: A Key Test of the Fed's Independence

This case marks the first controversy involving the "cause-based dismissal" of a Fed governor in the 111-year history of the Fed. No president has ever dismissed a sitting Fed governor in the 112-year history of the Fed.

Legal scholars believe this case could undermine the Fed's long-standing political independence. Economists typically prefer independent central banks, as they can more easily take unpopular actions, such as raising interest rates to combat inflation, than elected officials.

Many economists are concerned that if the Fed falls under the control of the White House, it will keep key interest rates below levels that are reasonable according to economic fundamentals, in order to satisfy Trump's demand for cheaper borrowing. This could accelerate inflation and raise long-term rates, such as mortgage and auto loan rates.

07 Future Outlook: The Supreme Court's Decision and Market Impact

Markets and analysts are closely watching the movements of the Supreme Court. If Cook is suddenly dismissed, it could lead to increased market volatility, with the dollar, U.S. Treasuries, and the stock market facing uncertainty in the short term.

This case has become a landmark event for testing the independence of the Fed and the boundaries of presidential executive power. If Trump wins the case, he will have decisive power to dominate monetary policy, potentially pushing for more aggressive interest rate cuts or other policies.

If Cook wins the case, it will strengthen the Fed's status as an independent agency and limit the president's ability to intervene in economic policy. The Supreme Court has not yet announced a specific timeline for whether it will hear the case, but the legal community generally expects that it will become one of the most closely watched legal and financial issues by the end of 2025.

Conclusion

The Trump administration has taken the case to dismiss Cook to the Supreme Court, marking a new phase in the struggle concerning the independence of the Fed. Although the Fed announced a 25 basis point rate cut on September 17, the White House clearly hopes to further influence the direction of monetary policy.

The outcome of this case will have a profound impact on the independence and direction of U.S. monetary policy. If Trump successfully removes Cook and gains a majority on the Fed, it could promote a more aggressive rate cut policy, boosting risk assets in the short term, but may threaten the Fed's ability to control inflation in the long term.

The cryptocurrency market has benefited from interest rate cuts, but may face higher volatility in the future due to the politicization by the Fed. Investors should closely monitor the Supreme Court's decision on this case and its potential ripple effects on global financial markets.