Last night, President Trump fired Lisa Cook from the board of the Federal Reserve—a move that has sparked widespread concern. Despite her refusal to step down, domestic markets appear relatively unshaken. However, international observers are sounding the alarm: the independence of the Federal Reserve is a cornerstone of global confidence in the U.S. economy.
Trump’s continued and increasingly aggressive efforts to undermine the Fed may be among his most destabilizing economic actions. While protectionist trade policies, tariffs, and nationalist policies already contribute to economic uncertainty, this latest move threatens the very framework that underpins financial stability. A common misunderstanding by Trump is that the Fed controls market interest rates. In reality, the Fed sets rates only for overnight lending between banks; broader market rates are determined independently by supply, demand, and investor expectations. Historically, even when the Fed has cut its short-term rates, long-term market rates have often risen in response—meaning that Trump’s interference is counterproductive to any goal of lowering borrowing costs.
These actions are eroding U.S. credibility, weakening the dollar’s status as the global reserve currency, and undermining the perception of American economic exceptionalism. Simultaneously, Trump is acquiring stakes in private firms such as U.S. Steel and Intel. The Department of Defense recently took a significant position in MP Materials, a U.S.-based rare earth minerals company. Meanwhile, Nvidia and AMD are reportedly remitting 15% of their revenue from certain AI chip sales to China to the U.S. government in exchange for export licenses. Earlier today, the Commerce Secretary signaled that the administration is exploring acquisitions of major defense contractors, including Lockheed Martin.
Together, these moves reflect a troubling shift toward a centralized, corporatist form of control, blurring the lines between government and private enterprise—a trend that many analysts view as a step toward fascism. The combination of undermining independent institutions, aggressive protectionism, and state involvement in private industry signals growing risks not only for the U.S. economy but for global financial stability.