Bessent defends Fed independence while Trump destroys it

Treasury Secretary Scott Bessent publicly backed Trump's Aug. 25, 2025 firing of Fed Governor Lisa Cook in an Aug. 27 Fox Business interview, calling the Fed an unaccountable institution. This marks the first time in modern history that a Treasury Secretary has endorsed political interference in Federal Reserve operations.

Trump's firing represents an unprecedented assault on Fed independence in 112 years. No president has ever attempted to remove a Fed governor for political reasons, threatening the central bank's credibility that protects Americans from inflation and economic manipulation.

Cook serves a 14-year term until 2038 and denies the mortgage fraud allegations. Legal experts call Trump's claims pretextual for his real goal: gaining Fed control to force interest rate cuts that benefit his political agenda over economic stability.

Bessent managed $307 million (as of Mar. 2024) through his Key Square Group hedge fund while simultaneously coordinating Treasury-Federal Reserve policy. This creates a massive conflict of interest where his personal investments benefit from destroying Fed independence.

The Federal Reserve Act allows presidential removal only for cause, not policy disagreements. The legal battle could reach the Supreme Court with implications for presidential authority over all independent agencies including the SEC, EPA, and FDIC.

Cook's legal team includes ALAbbe Lowell, a high-profile attorney challenging the removal in federal court. She's requesting a temporary restraining order to maintain her Fed position pending a full legal review of presidential authority.

Market analysts warn that a politically controlled Fed historically causes inflation disasters. The 1970s stagflation under Nixon's pressure on Fed Chair Arthur Burns shows the dangers of presidential interference in monetary policy decisions.

The Treasury Secretary's traditional role involves respecting Fed independence to maintain market confidence. But Bessent's public support for this political firing undermines the institutional separation that's protected the financial system's stability.