Trump Pushes the Fed Into Uncharted Territory

Summary

WSJ What’s News — Episode Summary

Episode Title: Trump Pushes the Fed Into Uncharted Territory
Date: August 26, 2025
Host: Azhar Sukri

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Overview

This episode delves into President Trump’s unprecedented move to remove Federal Reserve Governor Lisa Cook, analyzes the implications for the Fed’s independence and U.S. markets, and explores broader global news, including intensifying Ukrainian strikes on Russia’s energy sector and an unexpected resurgence of print media in the digital era.

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Key Discussion Points & Insights

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1. Trump’s Attempt to Remove Fed Governor Lisa Cook

Timestamps: 00:34 – 04:58

• Escalation at the Fed:

  • President Trump has sent a letter to Fed Governor Lisa Cook (a Biden appointee), citing unproven allegations of fraudulent mortgage documents as cause for her removal.
  • Cook responded that the president lacks authority to fire her and she would not resign.
  • The move is historically unprecedented and is likely to launch a legal showdown.

• Legal and Political Ramifications:

  • Alex Frangos, Europe Finance Editor:

    • On whether Trump has the authority:
      “Officially, he can fire a Fed governor for cause, so in a way, yes. But this has never been tested.” (02:06)
    • Supreme Court has recently indicated Fed appointees are insulated from White House firings, but the extent is unclear.
    • Trump’s intentions are explicit: to push for drastic interest rate cuts by reshaping Fed leadership.

  • Azhar Sukri:

    • “It is going to be uncharted territory for the Fed and, I guess, for the law.” (02:28)

• Potential Impact on Markets and Fed Policy:

  • If Cook is ousted and replaced (confirmation required by the Senate), Trump can further influence policy but not fully control the Fed.

  • Jerome Powell remains a bulwark for independence but is under increased pressure.

  • There’s already a shift toward rate cuts; Trump's moves may only affect the pace rather than direction.

  • Alex Frangos:

    • “It really seems to be about the speed of the cuts and how long it takes for them to play out.” (03:47)

• Wider Significance:

  • Frangos:
    • “It's a massive moment for the Fed. There’s no question the Fed has stood apart from politics for decades... This moment injects a huge amount of politics in it and brings the Fed back to a period really in the Nixon administration.” (04:06)
    • This signals a risk of re-politicization of monetary policy, potentially prioritizing short-term political needs over economic fundamentals.

• Market Reactions:

  • Initial market response is muted; slight drops in stock futures, rising treasury yields, and uptick in the WSJ dollar index.

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2. U.S.–China and Global Trade Developments

Timestamps: 04:59 – 06:51

• US–China Dialogue:

  • A senior Chinese trade negotiator is visiting Washington, suggesting both nations want to keep communication channels open during a planned tariff pause.
  • The U.S. demands increased Chinese agricultural imports and signaling tougher restrictions on tech-related imports.

• Tariff and Tech Tensions:

  • President Trump threatens new tariffs and export restrictions, particularly on countries that tax or regulate U.S. tech firms, which could impact the semiconductor industry.
  • Major automaker Hyundai pledges to raise its U.S. investments, coinciding with ongoing U.S.–South Korea trade negotiations.

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3. Ukraine’s Drone Strikes and Russia’s War Economy

Timestamps: 07:19 – 11:05

• Escalation of Drone Warfare:

  • Ukraine’s attacks have taken 13% of Russian fuel production offline, causing civilian and military fuel shortages, rationing in Crimea and Siberia, and fuel prices spiking by 45% since the start of the year.

• Economic and Military Impacts:

  • Yaroslav Trofimov, WSJ Chief Foreign Affairs Correspondent:

    • “The crude oil and natural gas export, that is the lifeblood of the Russian economy... The attacks on refineries create logistical problems... and also for the army itself.” (08:08)
    • Domestic disruptions extend beyond fuel: widespread flight cancellations and logistic delays are becoming the norm.
    • “It's really the first time since the war began that the airport disruptions are systematic... aviation is critical [in Russia].” (09:14)

  • Ukrainian Tactics and Innovations:

    • Ukraine is fielding more effective, longer-range drones, and may soon add domestically produced ballistic missiles—a potential “game changer.”

    • Western restrictions mean Ukraine develops these weapons independently.

    • Trofimov:

      • “If they do so, that would definitely be a game changer... because Ukraine should be able to increase the tempo and effectiveness of these long-range strikes.” (10:32)

• Strategic Aim:

  • Ukraine hopes these actions will impose real costs on Russia and its citizens, possibly making the conflict unsustainable for Moscow in the long run.

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4. The Surprising Renaissance of Print Media

Timestamps: 11:05 – 12:43

• The Onion’s Print Gamble:

  • Satirical publication The Onion, under new ownership, bet on print subscriptions—a rarity in today’s digital-first industry.
  • More than 50,000 paid print subscribers are expected to generate $6 million in revenue this year, tripling returns from 2024, though profitability remains out of reach.

• Digital Fatigue and Media Industry Trends:

  • Alexandra Brule, WSJ Reporter:

    • “People are just bombarded with content online. There's almost a nostalgia for the more of years past... Print is really this medium that people who want are subscribing to.” (11:56)
    • The rise of AI-generated answers is accelerating decline in digital traffic, pushing more outlets to embrace or expand print.

  • Other outlets (The Atlantic, Tablet, Complex) are also investing in print as a differentiator in a saturated online landscape.

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Notable Quotes & Memorable Moments

• Alex Frangos on the Fed shakeup:

  • “It’s a massive moment for the Fed... This moment injects a huge amount of politics in it and brings the Fed back to a period really in the Nixon administration.” (04:06)

• Yaroslav Trofimov on Ukraine’s impact:

  • “So now there are shortages of fuel in Russia and more importantly, the prices of fuel have surged by about 45% since the beginning of the year.” (08:08)
  • “Airport disruptions are systematic... trains are also being delayed for days and days. That’s all part of the Ukrainian policy that aims to bring the war home to Russia…” (09:14)

• Alexandra Brule on print nostalgia:

  • “People are just bombarded with content online. There’s almost a nostalgia for the more of years past.” (11:56)

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Timestamps for Major Segments

• Trump/Fed shakeup: 00:34 – 04:58
• US-China/Global trade: 04:59 – 06:51
• Ukraine/Russia war impact: 07:19 – 11:05
• Print media resurgence: 11:05 – 12:43

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Conclusion

This episode delivers a brisk yet comprehensive sweep through significant economic and geopolitical developments: President Trump’s extraordinary intervention at the Fed and its implications for U.S. monetary policy and market stability; ongoing trade maneuvering between the U.S., China, and other partners; the evolving nature of Ukraine’s war efforts against Russia’s critical infrastructure; and an unexpected revival of print journalism in the digital age. The reporting emphasizes how political risk is reshaping institutions, markets, and even the media landscape.

Transcript

[A]

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[B]

President Trump says he's removing Fed Governor Lisa Cook, escalating his efforts to take charge of the central bank. Plus, Ukraine's intensifying attacks on Russian energy infrastructure seek to hit Moscow where it hurts the most.

[C]

So now Ukraine is trying to even out the field. And the big difference is that Russia is dependent on its oil and gas revenue. Ukraine is being assisted by the European Union and other partner nations.

[B]

And in an ever more competitive digital media landscape, some publishers bet on good old fashioned print. It's Tuesday, August 26th. I'm Azhar Sukri for the Wall Street Journal. Here is the AM edition of what's news, the top headlines and business stories moving your world today. We begin in Washington where President Trump has followed through on his threat to remove Federal Reserve Governor Lisa Cook. He cited alleg that she submitted fraudulent information on mortgage applications back in 2021. Yesterday, Trump wrote to Cook that there is sufficient cause to remove you from your position. Cook, a Biden appointee, said the president had no authority to fire her and that she wouldn't resign. The Fed didn't immediately comment. For more on this unprecedented step and what it means for the central bank's future, I'm joined by Journal Europe finance editor Alex Frangos. Alex, first off, does Trump actually have the authority to fire Cook?

[D]

Well, officially he can fire a Fed governor for cause, so in a way, yes. But this has never been tested. This was something that came up in a Supreme Court case earlier this year. The Supreme Court gave some pretty wide latitude to the Fed appointees to be insulated from firings by the White House. But it's never been tested. And it's gonna be tested here. We have it.

[B]

Yes, indeed. It is going to be uncharted territory for the Fed and I guess for the law. And in terms of Trump's intentions, he's been very clear that he wants the Fed to drastically cut interest rates, assuming he can replace Cook. How much additional leverage does that give Trump to appoint someone who can push the Fed chair for those cuts?

[D]

Well, if she is removed. He could nominate a replacement. It would have to be approved by the Senate. There's already a vacant seat. After Adriana Coogler left, he appointed his advisor, Stephen Mirren. So this would definitely push things in President Trump's favor, but not necessarily enough to outvote the majority in terms of what the policy should be. And obviously, Jerome Powell, the head of the Fed, continues to stand up to Trump and says he's making his decisions based on what's right for the economy. But it definitely puts more pressure on the Fed to go Trump's way.

[B]

So do we think that the markets and investors are working on the assumption that Cook will be removed, or should we anticipate a lengthy court battle?

[D]

Well, it comes in an interesting time because we had Jerome Powell just end of last week saying he's kind of opening the door to cutting rates. So the effect of Cook, let's say she is replaced, let's say Mirren is appointed. So you'll definitely have more voices cutting rates. But it sounds like Jerome Powell wants to cut rates, too. So the market looks at this and says, well, that's the direction they're heading anyways. It really seems to be about the speed of the cuts and how long it takes for them to play out.

[B]

And as our colleagues Matt Grossman and Greg IP write this morning, this is Trump's boldest step yet in his push to take control of the Fed. Help us understand the broader significance of this move.

[D]

It's a massive moment for the Fed. There's no question the Fed has stood apart from politics for decades in which presidents, Republicans and Democrats have reappointed their Fed governors who their predecessors had appointed. There was always a sense that you wanted the next head of the Fed to be a consensus, continuity, candid, because they wanted that independence so that the person in charge of interest rates is focused on inflation and employment and nothing else. And so this moment injects a huge amount of politics in it and brings the Fed back to a period really in the Nixon administration where the White House can, for more short term political reasons, put pressure on the Fed to move rates up and down depending on what's good for the politics rather than what's good for the economy.

[B]

That was the Journal's Alex Frangos. Alex, thank you so much.

[D]

Thank you.

[B]

So far, the market's response to Cook's firing has been muted, with stock futures ticking lower and treasury yields rising along with the WSJ dollar index. In other news investors will be watching. Today, we are exclusively reporting that a senior Chinese trade negotiator is heading to Washington this week, a sign that the two sides want to establish regular communication communication during a pause on higher tariffs set to last through early November. Though the Trump administration has softened its tone on China, trade tensions persist between the two countries, with the US Demanding Beijing buy more soybeans and preparing to ramp up scrutiny of Chinese imports on items such as steel, copper and lithium. South Korea's Hyundai Motor Group has said it will boost its U.S. investment by $5 billion, bringing the total to $26 billion through 20. The carmaker's pledge came as President Trump said the U.S. is nearing a trade deal with South Korea. And separately, Trump is threatening to increase tariffs and impose export restrictions on countries that tax or regulate US Tech firms such as Google and Meta platforms, an issue that has loomed large over trade negotiations with important trading partners including the European Union and Canada. Trump's threat to curb exports of advanced chips specifically could also trigger concern among semiconductor makers like Nvidia and amd. Coming up, we go to Russia, where Kyiv's ever bolder attacks are taking a toll on Moscow's war economy. Plus, we'll look at why print media is making a comeback. That's after the break.

[E]

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[B]

Conditions appreciate now, while Europe and the US appear to be no closer to getting Russia to agree to a summit with Ukraine aimed at ending the war. Drone strikes by both sides continue to target key infrastructure. And we report that Ukraine's intensifying campaign against Russian refineries has taken some 13% of Russia's fuel production offline. The strikes have led to rationing at gas stations in Russian occupied Crimea and parts of Siberia, just as fuel demand spiked ahead of the harvest season. For more, I'm joined by the Journal's chief foreign affairs correspondent, Yaroslav Trofimov. Yaroslav, give us an idea of just how crucial the oil and gas sector is for Russia's economy and its war effort.

[C]

Well, you know, there are two sides to it. One is the actual crude oil and natural gas export, so that is the lifeblood of the Russian economy. Separately, there is also the refining industry inside Russia, which produces Fuel for consumption within Russia. And that has been the target of the Ukrainian attacks that are becoming more sophisticated and more impactful. So now there are shortages of fuel in Russia and more importantly, the prices of fuel have surged by about 45% since the beginning of the year, which does have a snowball effect throughout the Russian economy. And also hits on the refineries also create logistical problems not just for the civilian Russian economy, but up to a point for the military industries and also for the army itself. Because, you know, if there are fuel shortages, if it fuel is Russian, then it affects everything.

[B]

Yes. And as you write, Ukraine has recently taken the step of targeting Russia's export infrastructure, including an oil pipeline and a gas terminal. But it's also trying to cause disruption to everyday Russians. How successful has it been in that regard?

[C]

Well, it's really the first time since the war began that the airport disruptions are systematic. There are on some days several hundred flights being canceled. And this really has a snowball effect throughout Russia. You know, it's a country with huge distances, so aviation is critical. So trains are also being delayed for days and days. And that's all part of the Ukrainian policy that aims to bring the war home to Russia and to make it something that the Russian population doesn't just see on television and to create a real cost for the Russian economy and the Russian public.

[B]

So Ukraine is also developing new weapons to help it strike deeper into Russia. How much of a game changer could that be?

[C]

Well, we don't know yet because Ukraine hasn't really started using its long range missiles in large numbers yet. So far. Ukraine is mostly striking at Russia with drones. They can fly several hundred miles all the way up to the euros. And the drones carry smaller warheads and are slow. But for fixed targets that explode easily like refineries, they've been remarkably effective. The Western nations have been very reluctant to allow Ukraine to strike Russia with American or European made weapons because of fears of escalation. So Ukraine has had to develop this arsenal by itself and now it is about to field several types of missiles. It's hoping to be able to produce ballistic missiles. And if they do so, that would definitely be a game changer in terms of the overall balance of power because there are two wars going on. There is a war on the front lines, which is an attritional war with very slow movements. But then Ukraine should be able to increase the tempo and effectiveness of these long range strikes. Could really create costs for the Russian economy that go beyond the front line and that would perhaps make it unsustainable for President Putin to continue with the war for a long time.

[B]

Journal chief foreign affairs correspondent Yaroslav Trofimov, thank you so much. Thank you. And finally, with the phrase print is dead ringing in the ears of many news and magazine editors, the new owners of the Onion gambled big when they took over a year ago. But it seems so far the bet on print subscribers is paying off for the satirical public. More than 50,000 subscribers are paying as much as $9 a month, with print subscriptions generating an expected $6 million in revenue this year, up from less than $2 million in early 2024. WSJ reporter Alexandra Brule says that while the Onion isn't yet profitable, they sense an era of digital fatigue.

[F]

People are just bombarded with content online. There's almost a nostalgia for the more of years past. It's also really, really hard to be a digital publisher today. Digital publishers are experiencing declining traffic from Meta, from Google, and now that generative AI is here, that's happening at a faster pace. And people who ask Google a question can get an answer very quickly, never need to click on a link to a publisher's article. So print is really this medium that people who want are subscribing to these print publications. And it's very clear that there is a desire for this thing.

[B]

And it's not just the Onion. Other publications, including the Atlantic, Tablet and Complex, are also rolling out or expanding print editions in a bid to stand out in the crowded digital content space. And that's it for what's news for this Tuesday morning. Today's show was produced by Kate Bullivant and Daniel Bark. Our supervising producer was Christina Rauca. I'm Azhar Sukri for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.