President Donald Trump‘s firing of Federal Reserve Governor Lisa Cook on Monday could trigger a significant power shift within the central bank, potentially creating a Trump-appointed majority on its board and raising concerns over the future of regional Fed presidents, explained the macro strategist at the Bear Traps Report, Craig Shapiro.
How Can Trump Get His Favored FOMC Majority?
The analysis comes from a social media post by Shapiro on Tuesday, who outlined a potential “chain reaction” following Cook’s removal.
Shapiro suggested that with Cook’s seat now open, Trump could appoint two more governors, establishing a 4-3 majority on the board. That majority could later expand to 5-2 after Chairman Jerome Powell’s term as chair is over.
According to Shapiro, this “majority could stop regional Fed presidents from being reappointed,” or “open up the process for the next Fed chair to replace existing Fed Regional presidents in the second half of 2026.”
The possibility of such a significant overhaul in Fed leadership was something Shapiro noted “would be interesting.”
Why Did Trump Fire Lisa Cook?
The catalyst for this potential shakeup was Trump's decision to remove Cook “for cause.”
In a letter released Monday, the president cited “deceitful and potentially criminal conduct” based on a referral from the Federal Housing Finance Agency.
The allegations claim Cook made false statements on mortgage agreements, attesting that properties in both Michigan and Georgia were her primary residence on documents signed just two weeks apart.
Cook Says She ‘Will Not Resign’
Governor Cook has vehemently contested the firing, stating Monday evening that she “will not resign” and that “no cause exists under the law” for her removal, according to a New York Times report.
Her attorney called the move an “attempted illegal action.” While the allegations have been referred to the Justice Department, Cook has not been charged with any crime. The president’s action is a legally contentious move that critics argue could challenge the traditional independence of the central bank.
Price Action
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Tuesday. The SPY was down 0.11% at $641.79, while the QQQ declined 0.14% to $569.52, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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