Bulwark Takes — "Markets React Violently to Trump’s Fed Power Play" (with Ben Walsh)

Podcast: Bulwark Takes
Release Date: August 26, 2025
Host: Tim Miller
Guest: Ben Walsh (Sherwood News)

Episode Overview

This episode dives into the abrupt removal—via a social media "bleat" by Donald Trump—of Lisa Cook from the Federal Reserve Board of Governors, unpacking not only the political drama but its earthquake effects across financial markets. Host Tim Miller is joined by economics journalist Ben Walsh to analyze why this move has triggered such acute market volatility, what it signals about the Fed’s independence, and the chilling implications for future U.S. monetary policy.

Key Discussion Points & Insights

1. The Breaking News: Lisa Cook Fired by Trump

• [00:32] Donald Trump announces via his social media that he has fired Lisa Cook, the first Black woman to serve as a Fed Governor.
  • Trump claims justification based on allegations around Cook’s mortgage filings—though she has not been charged with wrongdoing, and the event is wrapped in ongoing, highly politicized anti-Fed rhetoric.
• Context: Lisa Cook was confirmed by the Senate and her removal is legally contentious.
• The news aligns with previous episodes’ concerns about Trump’s growing authoritarian tendencies and increasing pressure on independent government institutions.

2. Trump’s Broader War on the Fed

• [02:35] Ben Walsh:

  “Donald Trump is basically at war with the Fed right now. He does not like the Fed's interest rate policy. He thinks that rates should be cut in order to stimulate economic activity."

  • Trump wants lower rates to counter inflationary tariffs and spur growth ahead of the election, and is mounting an unrelenting campaign against both current Fed Chair Jerome Powell and broader Fed leadership.

3. How the Federal Reserve Works & Political Pressures

• [03:08] The Fed is governed by a Board, not just Jerome Powell. Recently, most of the Board has supported him, but there’s a smaller faction on the side of cutting rates.
• [03:36] Per Walsh, attacking Lisa Cook is less about her personally and more about pressuring the Fed as an institution, signaling to other governors the consequences of dissent:

  “This is really about, not about Lisa Cook, it's about a broad-scale pressure campaign against the Fed and their interest rate setting body."

4. The Question of Legality & Precedent

• [05:02] Walsh explains the legal ambiguity:

  “It's an open question whether he has the authority to do this, given the information that we know about Lisa Cook's mortgages."

  • The President can only remove Fed officials "for cause." Whether Cook's paperwork constitutes "cause" is expected to be challenged in court quickly, maybe as soon as the next day.

5. Why Markets Reacted So Sharply

• [07:11] Tim Miller presses for economic significance: Why are markets so sensitive to one Governor’s removal?
  • [08:07] Walsh answers:

    “Markets broadly view the US as a safe haven for assets… There is a premium in dollar-denominated assets that comes from the good governance and smooth functioning of these very large institutions like the Fed. The idea that even incrementally they could be subjected to this kind of pressure…will decrease investor confidence."

  • The independence of the Fed is fundamental to both domestic and global faith in U.S. markets.

6. Implications for Jerome Powell and Fed Independence

• [09:12] There’s concern this sets the stage for possible actions against Powell and further erosion of institutional independence.
  • [09:59] Ben Walsh:

    “Whatever percentage you had in your mind as the possibility that Trump would fire Jerome Powell…is now significantly higher."

  • There’s a risk that the whole “Fed independence setup could essentially collapse,” with unpredictable outcomes for economic stability.

7. Markets, Tariffs, and the Macro Backdrop

• [10:17] The news coincides with persistent tariffs (including developments with South Korea) and a sharp drop in the dollar, with gold prices soaring.
  • High-tech equities are rising, but tariffs and political attacks on the Fed are a "persistent drag" on the broader economy.
  • [10:58] Walsh notes much of the inflationary cost of tariffs has yet to hit consumers—when it does, market conditions could become much more volatile.

8. Memorable Market Analogy and Closing Insights

• [13:12] Ben Walsh with a memorable line:

  “Gold never goes up on good news. That’s the one thing you can take away from this. If gold is skyrocketing, something is wrong."

Notable Quotes & Timestamps

• Ben Walsh on Trump’s Motives ([02:35]):

  “Donald Trump is basically at war with the Fed right now. He does not like the Fed’s interest rate policy.”

• Ben Walsh on pressure campaign ([03:36]):

  “This is really about, not about Lisa Cook, it’s about a broad-scale pressure campaign against the Fed.”

• Ben Walsh on legal ambiguity ([05:02]):

  "Whether or not having two primary residence mortgages is cause for being fired from your job, I think is a very open question and will almost certainly be litigated very quickly.”

• Walsh on market reaction ([08:07]):

  “There is a premium in dollar-denominated assets that comes from the good governance and smooth functioning of these very large institutions like the Fed. The idea that…they could be subjected to this kind of pressure…will decrease investor confidence.”

• On gold’s spike ([13:12]):

  “Gold never goes up on good news. That’s the one thing you can take away from this. If gold is skyrocketing, something is wrong.”

Key Segment Timestamps

| Timestamp | Segment Description | |-----------|---------------------------------------------------------| | 00:32 | Breaking news: Trump announces Lisa Cook's firing | | 02:35 | Ben Walsh on Trump’s motives and Fed policy | | 03:36 | Discussion on Fed Board dynamics | | 05:02 | Legality and process of removing a Fed Governor | | 07:11 | Why markets reacted dramatically | | 08:07 | Walsh discusses confidence in US markets and institutions| | 09:59 | Risk to Powell and the broader Fed | | 10:58 | Macro impacts: tariffs, supply chains, and market movements| | 13:12 | Gold price spike and what it signals |

Tone & Final Takeaways

The conversation is urgent, clear-eyed, and slightly incredulous—reflecting just how extraordinary such a direct intervention in the Fed is. The guests’ language is accessible but pointed, especially in highlighting the long-term risks this moment signals for economic governance and US market stability.

Bottom Line:
Lisa Cook’s removal isn’t just another headline—it’s a direct challenge to Fed independence that has spooked markets, raised doubts over the future of U.S. economic policy, and opened legal and institutional questions that will reverberate for months or years. As Ben Walsh puts it, "If gold is skyrocketing, something is wrong."