Trump just took extraordinary action against the Fed. He may not go all the way

illuminem summarises for you the essential news of the day. Read the full piece on CNN or enjoy below:

🗞️ Driving the news: President Donald Trump has dismissed Federal Reserve Governor Lisa Cook, citing allegations of mortgage fraud
• This unprecedented move marks the first time in the Fed’s 111-year history that a sitting U.S. president has fired a central bank governor
• Despite frequent and escalating attacks on Fed Chair Jerome Powell, Trump has so far refrained from firing him — likely due to the potential market chaos such an action could unleash

🔭 The context: Since beginning his second term in January, Trump has sharply criticized Powell for not lowering interest rates, frequently issuing personal insults and threats
• His broader approach mirrors previous high-stakes moves, such as his April tariffs, which were later rolled back amid market backlash
• Trump's pattern of provocative action followed by strategic retreat underscores a political style that tests institutional limits without fully breaking them

🌍 Why it matters for the planet: A politically compromised Federal Reserve could destabilize global financial markets, weakening trust in the U.S. economy’s policy foundations
• Central bank independence is vital for managing economic cycles and supporting sustainable investment environments — including those critical for funding clean energy, climate resilience, and sustainable infrastructure
• If politicized, interest rate policy could shift from data-driven analysis to election-focused tactics, jeopardizing long-term climate and economic planning

⏭️ What's next: Market observers and institutional stakeholders are closely watching for further moves by the Trump administration
• While Powell remains in position, Cook’s dismissal could set a precedent for removing other dissenting voices within the Fed
• Should Trump escalate efforts to reshape the Fed, expect intensified resistance from economists, financial leaders, and potentially Congress
• Key upcoming signals will include Trump’s next monetary policy statements, market reactions, and any legal challenges tied to Cook’s firing

💬 One quote: “This is an attack on the institution,” said Justin Wolfers, economics professor at the University of Michigan

📈 One stat: In reaction to Trump’s April tariffs, U.S. bond yields spiked, forcing the government to offer higher returns to borrow money — a signal of diminished investor confidence.

See on illuminem's Data Hub™ the sustainability performance of JPMorgan, Goldman Sachs, and the Federal Reserve and its peers.

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