Trump’s Move to Fire Fed Governor Sets Up New Legal Test of Presidential Power

Summary

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WSJ What’s News – PM Edition

Episode Title: Trump’s Move to Fire Fed Governor Sets Up New Legal Test of Presidential Power
Date: August 27, 2025
Host: Alex Osola (B)
Main Theme: Exploring President Trump’s extraordinary attempt to oust Federal Reserve Governor Lisa Cook, setting up a pivotal Supreme Court challenge over presidential powers, alongside coverage of a tragic school shooting in Minneapolis, revelations on a major Beijing-linked cyber-espionage campaign, and key business headlines.

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Episode Overview

This episode centers on President Trump’s unprecedented effort to dismiss Federal Reserve Governor Lisa Cook, raising legal and constitutional questions about executive authority over independent agencies. The show also provides updates on a mass shooting at a Minneapolis Catholic school, expands on developing news about Chinese espionage, reviews Nvidia’s earnings and the stock market, and discusses the challenges facing the meat and dairy industry due to global droughts.

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Key Discussion Points & Insights

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1. Minneapolis Catholic School Shooting (00:48–02:06)

• Summary: A shooting occurred at Annunciation Catholic School during a school Mass, resulting in two dead children and 17 injured, of whom 14 are minors; two remain in critical condition.
• Perpetrator & Investigation: The shooter, Robin (Robert) Westman, used multiple firearms and is being investigated for domestic terrorism and hate crime charges.
• Law Enforcement Response:
  • Quote: “The sheer cruelty and cowardice of firing into a church full of children is absolutely incomprehensible.” — Minneapolis Police Chief Brian O’Hara [01:34]
• Federal Response: President Trump orders US flags at half-staff in honor of the victims.

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2. Expanded Beijing-Linked Espionage Campaign (02:07–04:43)

• Summary: The FBI revealed the “Salt Typhoon” Chinese espionage campaign targeting US telecoms was far more extensive than previously understood, affecting 80 countries and 600 companies, with high-level targets including Donald Trump.
• Implications:
  • Accessed sensitive data including US customer info and law enforcement intel.
  • Threat is “pretty well contained,” but not fully eradicated; dormant actors might still lurk in some systems.
• International Reaction: China categorically denies involvement.
  • Quote: “China has denied involvement... They’ve asked the United States for evidence. They said that they don’t find the evidence 100% credible. So they have completely denied involvement.” — Aruna Vishwanatha [04:28]
• Notable: First significant intelligence update in six months.
  • Quote: “So the campaign was just so much wider than they had realized, and it gave these spies potentially huge amounts of access to the global movements of… high value targets.” — Aruna Vishwanatha [03:08]

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3. Market Update: Nvidia Earnings, Agriculture & Water Risk (04:50–07:34)

• Nvidia Results:
  • S&P 500, Dow, and Nasdaq close at record or near-record highs.
  • Nvidia’s Q2 sales hit $46.7B, up 56% YOY but only matched expectations; data center growth slightly lags analyst hopes.
• Agriculture & Water:
  • Drought Impact: Global droughts pose a major threat to meat and dairy producers, with investors pressing for greater transparency regarding water security plans.
  • Quote: “The meat and dairy industry aren’t doing enough to manage water risk right now. ... Water isn’t just an environmental concern, but it’s also a really significant financial concern.” — Clara Hudson [07:02]
  • Favorable weather aids US corn crops, but heat waves/droughts threaten livestock farming worldwide.

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4. Trump’s Attempt to Fire Fed Governor Lisa Cook (08:26–13:14)

• Background: Trump moved to fire Biden appointee Lisa Cook based on unproven mortgage fraud allegations, despite Cook never being charged or convicted. Trump claims “cause” for her dismissal, a requirement under the Federal Reserve Act of 1913.
• What is At Stake:
  • The Supreme Court could re-examine legal precedents about presidential power over independent agencies.
  • Historically, cause is required for firing Fed governors before 14-year terms end.
  • Conservatives question the constitutionality of such protections.
  • Prior 1935 SCOTUS rulings allowed independence; recently, the court signaled it may revisit the issue.
  • Quote: “The Supreme Court today is skeptical of that theory and has signaled that it is willing to revisit it.” — Jess Bravin [09:06]
  • Notably, an unsigned court order hinted the Fed may warrant unique consideration, separate from other agencies.
    • Quote: “They included a very interesting signal in their unsigned order. And the signal was the Federal Reserve may be different because of its own distinct history.” — Jess Bravin [10:02]
• Legal & Procedural Questions:
  • Is unproven allegation from a Trump-appointed official sufficient “cause?”
  • Lisa Cook can (and pledges to) sue, arguing lack of due process and no valid cause.
  • Very little precedent exists for firing a Fed governor in this manner.
• Historical Context:
  • Only a handful of somewhat comparable removals exist, none with strong judicial guidance.
  • Quote: “There’s very little precedent on this question about whether the president has the constitutional power to remove officials without cause.” — Jess Bravin [12:10]

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Notable Quotes & Memorable Moments

• On the significance of the Supreme Court’s upcoming decision:
  • “This is going to be a tough one for the Supreme Court. ... The question is, what does it take to establish that cause? Is it just the President’s opinion?” — [00:30] (Speaker C)
• On the scale and sophistication of the Chinese espionage campaign:
  • “They’ve contacted 600 different companies that they think either were targeted or somehow affected as part of this breach. So the campaign was just so much wider than they had realized...” — Aruna Vishwanatha [03:08]
• On investor worries about agriculture:
  • “Water isn’t just an environmental concern, but it’s also a really significant financial concern. And that’s why investors are really pressing to get more transparency...” — Clara Hudson [07:02]
• On the scope of presidential power over the Fed:
  • “The Federal Reserve may be different because of its own distinct history.” — Jess Bravin [10:02]

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Timestamps for Key Segments

• 00:48–02:06 – Minneapolis School Shooting: Details, official reactions
• 02:07–04:43 – Beijing Espionage Campaign: Scope, containment, China’s denial
• 04:50–07:34 – Markets update: Nvidia earnings, drought risk for agriculture
• 08:26–13:14 – Trump’s move against Fed Governor Cook: Legal background, Supreme Court context, expert commentary

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Conclusion

This episode skillfully combines breaking news with in-depth legal and business analysis. The central focus—the Trump administration’s challenge to Federal Reserve independence—frames a consequential constitutional showdown for the Supreme Court, with implications for US governance and market stability. Other segments highlight pressing societal, security, and economic challenges, making this a must-listen for those tracking US policy, law, or market trends.

Transcript

[A]

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[B]

At least two children were killed in a shooting at a Catholic school in Minneapolis. Plus, President Trump's attempt to fire Federal Reserve Governor Lisa Cook is setting up a new legal test of presidential power.

[C]

This is going to be a tough one for the Supreme Court. If it says, for example, that, well, the difference here is that the president asserted there was cause to remove Lisa Cook, then the question is, well, what does it take to establish that cause? Is it just the President's opinion and.

[B]

How A Beijing linked espionage campaign was much more extensive than initially understood. It's Wednesday, August 27th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world day. We begin this evening with the latest on the shooting at the Annunciation Catholic School in Minneapolis. The attack has left two children dead and 17 other people injured, 14 of whom are children. Two of the injured children are in critical condition. The shooting took place just before 8:30am local time during a Mass that marked the first week of the school year. It was In a news conference, Minneapolis Police Chief Brian o' Hara described the attack.

[D]

Shooting through the windows, he struck children and worshippers that were inside the building. The shooter was armed with a rifle, a shotgun and a pistol. This was a deliberate act of violence against innocent children and other people worshiping. The sheer cruelty and cowardice of firing into a church full of children is absolutely incomprehensible.

[B]

FBI Director Kash Patel said that the shooter was identified as Robin Westman, born as Robert Westman. He added that the shooting was being investigated as an act of domestic terrorism and as a hate crime against Catholics. President Trump said that the US Flag will be flown at half staff at the White House until Saturday night as a mark of respect for the victims. Today, the FBI said that a Beijing linked years long espionage campaign that hit US Telecom companies and swept up Donald Trump's phone calls was much broader and more extensive than investigators initially understood. The Journal had reported last year that the Salt Typhoon campaign dates back to at least 2019 and allowed spies to access US customer call data, private communications for a limited number of individuals, sensitive law enforcement information and technical network information that could inform future attacks. Aruna Vishwanatha is an editor for WSJ and is here now with more. Aruna, what is new here? How much More extensive is this hack than investigators initially thought.

[E]

Towards the end of last year, there was a flurry of revelations. If you remember Donald Trump's phone, they collected some information about his phone, about some Democrats. Like all these telecom companies were hit. But then it's been pretty quiet. This was the first big substantive update we got in more than six months about what investigators were finding. And it was pretty extensive. It was hit companies, potentially in 80 different countries. They've contacted 600 different companies that they think either were targeted or somehow affected as part of this breach. So the campaign was just so much wider than they had realized and that it gave these spies potentially huge amounts of access to the global movements of some of these high value targets in.

[F]

A way that they didn't quite appreciate.

[B]

You're using the past tense here, but do we know for sure that this hack is done?

[E]

What FBI officials say is that they think they are pretty well contained. So what that means is not necessarily that they've kicked everyone out of every system that they were in, but that they think they've done a decent enough job at identifying them, that even if some of these actors are still in certain systems, they're dormant. And as soon as they start trying to do something, they will spot them and be able to kick them out.

[B]

What has Beijing said about this?

[E]

China has denied involvement in this campaign. They've asked the United States for evidence. They said that they don't find the evidence 100% credible. So they have completely denied involvement.

[B]

That was WSJ editor Aruna Vishwanatha. Thanks, Aruna.

[E]

Thank you.

[B]

Investors expectations for blowout results from Nvidia, the world's most valuable company, helped lift the S&P 500 to another record close. Major US indexes ended higher. The Dow was up about 0.3%. The S&P 500 rose about 0.2% and the Nasdaq also added roughly 0.2%. And reporting after the Bell Nvidia set fresh sales records for the second quarter as it continued to capitalize on strong demand for AI computing power and shrugged off uncertainty surrounding its business in China. Sales in the July quarter hit $46.7 billion, up 56% from the year earlier period and roughly in line with analyst estimates. Revenue from the important data center segment, which includes sales of the company's most powerful chips, also rose 56% to $41.1 billion, but came in slightly lower than analysts expectations. As we mentioned in yesterday's show, favorable weather conditions in the US Midwest have helped corn crops thrive. This season. But the weather may not be so kind to producers of meat and dairy. Droughts have hit countries around the globe. Worries about increasingly high temperatures have investors wondering how farming businesses are dealing with water shortages. A report out this week from the global investor network Farm Animal Investment Risk and Return Initiative found a lack of information about how large global meat and dairy producers plan to secure their water supply. I'm joined now by reporter Clara Hudson, who covers sustainability for WSJ Pro. Clara, how significant is drought risk for the meat and dairy industry?

[F]

It's extremely significant. We've all been dealing with heat waves and droughts in the US and across the globe. Because of that, access to water has become a much bigger concern for investors that are closely watching the agriculture industry. So farms have to make sure that they're planning to get the water they need for animals to drink as well as to cool them off when it's really hot.

[B]

And so for the producers of meat and dairy, what are they doing to manage this risk?

[F]

There are ways for farmers to better manage their water use, but ultimately the meat and dairy industry aren't doing enough to manage water risk right now. And the report is also emphasizing that water isn't just an environmental concern, but it's also a really significant financial concern. And that's why investors are really pressing to get more transparency and more details about how companies are trying to navigate this.

[B]

That was WSJ reporter Clara Hudson. Thanks, Clara. Thank you. Coming up, could Trump's attempt to fire a Fed governor cross a red line for the Supreme Court? More on that after the break.

[G]

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[B]

As President Trump seeks to fire Federal Reserve Governor Lisa Cook, he is pushing his drive for unilateral control of the US Government to new levels. In a letter published on social media on Monday, Trump told Cook that unproven allegations of mortgage fraud were sufficient cause for dismissal. Cook, a Biden administration appointee, has vowed to fight Trump's action. Her lawyer said she would file suit, setting up a case likely to reach the Supreme Court that would test the limits of presidential power I'm joined now by WSJ Supreme Court correspondent Jess Braven. Jess Cook has not been charged with a civil or criminal violation. So does Trump have the authority to throw her out of her post?

[C]

The very clear answer is we don't know. The Federal Reserve act passed in 1913 says that the president can only remove Fed governors for cause before their terms expire, and their terms are 14 years. But in recent decades, conservatives have questioned whether it is constitutional to have independent agencies or at least federal officers who can't be removed at the pleasure of the president. And they argue that infringes on the president's power to run the executive branch. So although the Supreme Court upheld the Congress's ability to establish these independent agencies and put these tenure protections on some commissioners and board members, in fact that was upheld in 1935. The Supreme Court today is skeptical of that theory and has signaled that it is willing to revisit it. Earlier this year, after Trump removed several members of boards who had these tenure protections, members of the National Labor Relations Board and the Consumer Product Safety Commission, lower courts reinstated them under this old precedent. But the Supreme Court granted Trump's emergency request to fire them, at least until the litigation is ultimately resolved. And that was sending a very strong signal that they are getting ready to remove those tenure protections. But they included a very interesting signal in their unsigned order. And the signal was the Federal Reserve may be different because of its own distinct history. And so the majority suggested that maybe Fed governors are different now. It didn't provide a lot of justification for that distinction. And the dissenters, led by Justice Lena Kagan, said there wasn't any other than the majority's apparent fear that letting the president mess with the Federal Reserve was much more consequential than letting him switch the members of the Consumer Product Safety Commission anyway. Now we're going to find out what that really means.

[B]

Bill Pulte, a Trump appointee who leads the Federal Housing Finance Agency, publicized the mortgage allegations and referred them to the Justice Department. Would that count as cause for removing Cook, the president?

[C]

In the letter he posted on social media, he said there was cause. And the cause was an alleged mortgage fraud that Lisa Cook, a Biden appointee, committed before she was appointed to the Fed board and before she was confirmed by the Senate. Those are allegations that were dug up by his own administration. But she hasn't been charged with a crime. She hasn't been convicted of a crime because typically when people are accused of wrongdoing in the United States, there's a formal process where they get to respond and their side of the story. And a neutral party is supposed to decide whether they are responsible or not and what the penalty should or should not be. So here, if someone who's not been convicted of a crime or charged with a crime, and she's accused not by the Department of Justice, incidentally, but by a federal housing official appointed by President.

[B]

Trump, what legal options does Cook have to challenge Trump's decision to remove her from her post?

[C]

She can sue, which she has pledged to do, arguing that the president exceeded his authority, that he needs to have cause to remove her. He hasn't provided cause, and he has not provided her an opportunity to respond to any allegations. There's very little precedent on this question about whether the president has the constitutional power to remove officials without cause. There haven't been that many times that the president has done it. The first time was in 1912, when President William Howard Taft removed two members of a now defunct federal regulatory board. But he didn't do it the way that Trump did it. In 1969, President Richard Nixon removed the administrator of Fannie Mae, who had been left over from the Lyndon Johnson administration, for cause. President Nixon said in a letter. He didn't say what that cause exactly was, but the administrator did not pursue a lawsuit. So we don't have any precedent on what counts as cause. And even if she did do this, is that the kind of cause that's contemplated and we basically don't know.

[B]

Jess Bravin covers the Supreme Court for the Journal. Thanks, Jess.

[C]

You bet.

[B]

And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Bienname and Anthony Banci with supervising producer Michael Cosmides. I'm Alex Osoloff for the Wall Street Journal. We'll be back with a new show tomorrow morning.

[H]

Thanks for listening.