The Daily – "Trump’s Takeover of the Fed"

Date: August 27, 2025
Host: Michael Barbaro
Guest/Reporter: Ben Casselman

Overview

This episode delves into President Trump’s unprecedented efforts to assert control over the Federal Reserve by attempting to fire a sitting governor, Lisa Cook—a move that represents the most direct challenge in decades to the Fed’s tradition of political independence. NYT’s Ben Casselman guides listeners through Lisa Cook’s background, her pioneering research, the mechanics of Trump’s maneuver amid Project 2025 ambitions, and what this all may mean for the future of U.S. economic policy.

Key Discussion Points and Insights

1. Who Is Lisa Cook?

Timestamps: 01:51 – 07:19

• Early Life and Inspiration

  • Lisa Cook grew up desegregating schools in 1960s Georgia; this experience profoundly shaped her and left her with a lasting physical and emotional scar.
  • Quote:
    "Some of them weren't accustomed, I guess, to seeing black children. So I was definitely beaten up."
    — Lisa Cook (02:47)
  • At Spelman College, she fell in love with economics during a hike up Mount Kilimanjaro.
  • Quote:
    "I was hiking alongside a British economist who by the end of the trek had me convinced that economics possessed the tools to address some really big and important questions."
    — Lisa Cook (03:55)

• Academic and Policy Career

  • Obtained PhD from UC Berkeley; one of very few Black women in economics.
  • Worked in international relations—Russia specialist, Treasury, and the White House.
  • Her best-known research connects personal safety and institutional protection to economic innovation, beginning from her work in post-Soviet Russia, but especially looking at Patent applications by Black Americans during periods of racial violence.
  • Quote:
    "Uncertainty is a tax. It is a tax. It is a tax on businesses. They can't plan, they don't know how to invest in this environment, and it keeps changing."
    — Lisa Cook (05:23)

• Influence on Economic Thought

  • Her research argues that wide-scale oppression stifles economic innovation for oppressed groups—and for the wider economy.
  • Efforts to diversify the economics profession escalated her prominence, catching the attention of President Biden.

2. Cook’s Contentious Confirmation and Role at the Fed

Timestamps: 07:19 – 09:51

• Appointed by President Biden in 2022; faced extremely narrow and partisan Senate confirmation (broken by VP Kamala Harris).
  • Quote:
    "The vote ultimately came down to a 50-50 tie...That was broken by Kamala Harris and put Lisa Cook on the Board of Governors."
    — Ben Casselman (09:36–09:46)
• Critics, especially Republicans, questioned her qualifications, dismissing her research as “social science” instead of monetary policy.
• Cook’s seat makes her one of the single most influential actors over U.S. (and global) economic policy.

3. Trump’s Project 2025 and Vision for the Fed

Timestamps: 09:51 – 12:18

• While out of office, Trump and his allies began planning a strategy—Project 2025—to bring the Fed under greater executive control.

• History of clashing with Fed Chair Jay Powell over interest rates; Trump desired direct influence, disregarding the Fed’s longstanding independence.

  • Quote:
    "The whole idea of Fed independence is this sort of bedrock concept. That's clearly not a vision that Trump shares."
    — Ben Casselman (11:18)

• Efforts to fire Powell previously blocked by legal and political barriers. Now, Trump targets a regular Board member—Cook.

4. How Targeting Lisa Cook Would Flip the Fed

Timestamps: 13:38 – 14:52

• Out of seven Board governors, five were Biden appointees at Trump’s inauguration; with one seat already vacant and two Trump appointments, removing Cook would give Trump a majority to reshape Fed policy.
  • Quote:
    "To have a majority of the board, he needs a fourth… The only way for him to get a majority...is to fire someone."
    — Ben Casselman (14:14–14:24)
• The Federal Reserve Act permits firing “for cause” only—traditionally meaning gross misconduct related to official duties.

5. The Role of Bill Pulte and the Mortgage Allegation

Timestamps: 15:19 – 19:56

• Bill Pulte, head of the Federal Housing Finance Administration (FHFA), uses access to mortgage records to surface accusations against political enemies, including Lisa Cook.
  • Quote:
    "He accuses Letitia James...of mortgage fraud...And last week, sort of out of nowhere, he does the same to Lisa Cook."
    — Ben Casselman (16:55)
• Allegation: In 2021, Lisa Cook designated two different homes as her “primary residence” for mortgage paperwork within two weeks—a potential technical violation that could be characterized as mortgage fraud.
• No evidence of criminal charges or intent; circumstances not investigated in court.

6. Trump’s Firing of Cook: Legal and Political Stakes

Timestamps: 19:56 – 21:30

• Trump seizes on the mortgage paperwork as his “for cause”; calls on Cook to resign—then fires her when she refuses.

  • Quote:
    "He accuses her of, quote, deceitful and potentially criminal conduct in a financial matter, and...he's firing her."
    — Ben Casselman (19:56)

• Legal scholars doubt that this constitutes sufficient “cause,” noting it involved private conduct before her Fed tenure and hasn’t been proven in court.

• Cook refuses to step down; a court battle is imminent.

  • Quote:
    "We don't know, but we're gonna find out, because Lisa Cook says she's not resigning and in fact is suing to hold on to her position...Legal experts and lawyers...say basically, probably not. Trump probably does not have particularly strong legal argument here."
    — Ben Casselman (20:12)

7. Collapse of Fed Independence: Historical Moment

Timestamps: 21:30 – 23:52

• Casselman characterizes this as a direct, premeditated attack on the Fed—the clearest threat to its independence in generations.

  • Quote:
    "This was a targeted effort by the White House to find somebody on the board that they could find cause to fire so that the President can take control of the Fed...This is the clearest, most present danger to that [independence] that we've seen in decades."
    — Ben Casselman (21:30)

• Despite the drama, financial markets have remained calm so far; Casselman points out that harmful effects may only become apparent over years, given institutions' slow-moving nature.

  • Quote:
    "We wouldn't expect to see the impact of these kinds of assaults...today, tomorrow, even next year. These are things that have taken a generation to build up, and it could take time for the effects of their erosion to show through."
    — Ben Casselman (23:39)

8. The Irony of Lisa Cook’s Own Research and What’s Lost

Timestamps: 23:52 – 25:24

• Host and Casselman discuss the irony: Cook’s pioneering research detailed how insecurity harms innovation and economic performance—and now she is herself the target of arbitrary political attack.

  • Quote:
    "One fairly indisputable fact in this moment is that people who work for the United States government don't feel safe and secure in their work. And I wonder what Professor Cook would say about the implications of that."
    — Podcast Host (23:52)

• If Cook is ousted, the Fed will lose expertise crucial to understanding the very effects Trump’s attack could have.

Memorable Quotes

• On adversity fueling research:
  • "When black Americans were facing lynchings, they weren't filing a lot of patent applications."
    — Ben Casselman (05:05)
• On the attack's significance:
  • "This wasn't a general crackdown on mortgage fraud that happened to catch up Lisa Cook...This was a targeted effort by the White House."
    — Ben Casselman (21:30)
• On institutional fragility:
  • "We have data that we can trust, that we have institutions that operate with a measure of independence...it could take time for the effects of their erosion to show through. But that doesn't mean that those effects are not real."
    — Ben Casselman (23:39)

Important Segment Timestamps

• 01:51: Lisa Cook’s childhood and the roots of her economic research.
• 07:19: Cook’s academic legacy and pathway to Federal Reserve.
• 08:04: Senate pushback and the role of race and “wokeism.”
• 09:36: The razor-thin confirmation vote.
• 10:11: Trump’s initial efforts to shape the Fed.
• 14:14: The math behind Board control and why Cook is a target.
• 16:55: Bill Pulte’s role and mortgage document accusations.
• 19:26: Trump seizes official “cause” to dismiss Cook.
• 20:12: Legal challenges—does the president have grounds?
• 21:30: Breakdown of what’s really at stake for Fed independence.
• 23:52: Long-term consequences for government and economic functioning.

Closing Developments

• Trump, forecasting a majority on the Fed Board, vows to lower interest rates quickly (25:35).
• Plans to name a replacement for Cook are in motion even as legal battles swirl (25:57).

Final Thoughts

This episode offers a dramatic, clear-eyed examination of the stakes as institutional guardrails around the Fed appear to be breaking down, with experts warning that the full economic ramifications will unfold only over time. At the center is Lisa Cook—a barrier-breaking economist whose own scholarship illuminates the cost of institutional instability and targeted political attacks.