The Fed's independence faces its biggest test yet.

I'm Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

Are you new here? Get free emails to your inbox daily. Would you rather listen? You can find our podcast here.

Today’s read: 12 minutes.

SPONSORED

A clearer view starts with your liver’s health.

Tangle gives you true perspective on politics.

Dose gives your liver the real support it deserves.

Your liver handles hundreds of vital daily tasks — from digestion to energy regulation — yet it often goes unnoticed. Dose is an orange juice–flavored daily shot with a clinically backed formula of curcumin (24× more bioavailable*), milk thistle, ginger, and dandelion root.

Vegan, zero sugar, gluten-free — simple, science-forward care you can trust for your most essential organ. Use "TANGLENEWS" at checkout for 30% off your order.

*24× more bioavailable at 300 mg vs turmeric 95% at 1500 mg over 24 hours

Get 30% Off

Calling all college students.

Tangle is looking for passionate, curious, and driven college students to join our college ambassador program. If you care about journalism, politics, or media — and want hands-on experience working with an organization like Tangle — this is your chance.

Tangle ambassadors represent Tangle on their campus, spearheading creative outreach efforts to engage your fellow students. They will also make connections with ambassadors at other schools to share ideas and strategies, with a focus on building skills in media, marketing, and organizing. 

This is a paid position, requiring 2–4 hours per week during the fall semester.

Applications will be open from August 27 to September 5. If you or someone you know is interested, we are accepting applications here.

Email Will Kaback at will@readtangle.com with any questions!

Quick hits.

1. BREAKING: Law enforcement is responding to a shooting at a church in Minneapolis, Minnesota. Authorities say two children were killed, and the suspected shooter is also dead (The latest)
2. A federal judge dismissed a lawsuit filed by the Trump administration against 15 active and senior federal judges in Maryland. The administration had challenged their ruling that barred federal immigration officials from immediately removing migrants who are challenging the legality of their detentions. U.S. District Judge Thomas Cullen found the administration did not have the legal right to sue. (The dismissal)
3. A Utah judge threw out the state’s congressional maps and directed the legislature to draw new districts in compliance with a 2018 ballot initiative that banned partisan gerrymandering. (The ruling)
4. The Trump administration is reportedly reinstating neighborhood checks to vet immigrants applying for U.S. citizenship, in which U.S. Citizenship and Immigration Services officials interview applicants’ neighbors and coworkers. (The practice)
5. U.S. health officials confirmed a case of myiasis, caused by the New World screwworm, in a Maryland resident, the first travel-associated case of the parasitic infection since 2024. Mexico and Central America are fighting a screwworm outbreak in cattle and humans, but health officials said the risk of contagion in the Maryland area is low. (The case)
6. Ukrainian officials said Russia's military has crossed into the eastern industrial region of Dnipropetrovsk following an offensive that began in June. (The update)

Today’s topic.

Trump’s attempt to fire Lisa Cook. In a letter posted to Truth Social on Monday night, President Donald Trump ordered the removal of Federal Reserve Governor Lisa Cook from her position for alleged mortgage fraud. Citing the Federal Reserve Act of 1913 and his powers under Article II of the Constitution, Trump stated that he was removing Cook “for cause.” Cook responded by saying that “no cause exists under the law” and that the president did not have the authority to fire her. Last week, Trump requested Cook’s resignation due to her alleged fraud; Cook declined, and said she will sue Trump in response to his attempt to fire her.

Back up: President Trump has criticized the Federal Reserve Board of Governors, and Fed Chairman Jerome Powell, for deciding not to lower the Federal Funds Effective Rate — the central bank’s interest rate for lending — so far in his term. At the most recent meeting of the Fed Board in August, Chairman Powell cited inflationary concerns as a reason not to lower interest rates. President Trump publicly considered firing Powell before opting against it. At the Federal Reserve’s annual symposium in Jackson Hole, Wyoming, Powell indicated that the Fed would likely cut interest rates in September.

We covered Trump’s threats to fire Powell here. 

In his open letter, Trump claimed — based on a report from Federal Housing Finance Agency Director Bill Pulte — that Cook made conflicting statements in 2021 that amounted to mortgage fraud, first declaring a Michigan property as her primary residence then signing a separate agreement two weeks later claiming a home in Georgia as her primary residence. The president argued that it was “impossible” for Cook to honor both agreements, saying the alleged fraud constituted grounds for her dismissal. Separately, the Trump administration has also accused New York Attorney General Letitia James and Senator Adam Schiff (D-CA) of mortgage fraud.

Despite the order, whether Trump has the legal grounds to remove Cook from the Federal Reserve Board of Governors is unclear. In a statement on Tuesday, Cook’s lawyer Abbe David Lowell said that Cook would be challenging her dismissal in court. “[Trump’s] attempt to fire her, based solely on a referral letter, lacks any factual or legal basis,” Lowell said. A spokesperson for the Federal Reserve stated that the board will “carry out its duties as established by law.” Both the board and President Trump said they would abide by a court decision.

Trump has highlighted the fact that, if Cook’s dismissal is successful, the Federal Reserve Board will be composed of a majority of his appointees. Cook was appointed by President Joe Biden in 2022. 

We’ll get into what the left, right and financial writers are saying about Cook’s firing and legal challenge below, then my take.

What the left is saying.

• The left strongly opposes the move to fire Cook, with many saying it is counterproductive to Trump’s goal of a rate cut.
• Others suggest the evidence against Cook is flimsy. 

The Bloomberg editorial board argued “firing Lisa Cook won’t bring down interest rates.”

“The pressure [from Trump] isn’t likely to make much of a difference in the Fed’s rate decisions anytime soon. Both Powell and Cook — whose terms as chair and governor extend to May 2026 and January 2038, respectively — enjoy strong job protections,” the board wrote. “Yet perceptions matter. If the Fed is even seen as doing the president’s bidding, the repercussions will almost certainly be the opposite of what he wants. Longer-term Treasury-bond yields, the benchmark for interest rates throughout the economy, will increase as investors worry that a weakened central bank will fail to contain inflation — in one signal, the yield on the 30-year bond ticked up several basis points after the president moved to fire Cook.”

“As of last week, markets still appeared to believe in the Fed’s independence. When Powell suggested at the Jackson Hole Economic Policy Symposium that a rate reduction could be coming in September, Treasury yields declined significantly at all maturities, indicating confidence that the central bank remained in control,” the board said. “Hence, there’s still a chance that — despite complications introduced by misguided trade and fiscal policies — the central bank might achieve a ‘soft landing,’ in which it gets inflation down to its 2% target without causing a recession.”

In his Substack, Paul Krugman wrote “Trump’s attempt to fire a Fed governor is illegal. Now we find out whether that matters.”

“At this point the immediate onus is on Jerome Powell, the Fed chairman. He has the right — I would say the obligation — to say, ‘Show me the legal basis for this action.’ If Trump’s officials can’t provide that basis, he should declare that as far as he is concerned, Cook is still a Fed governor,” Krugman said. “If Powell caves, or the Supreme Court acts supine again and validates Trump’s illegal declaration, the implications will be profound and disastrous. The United States will be well on its way to becoming Turkey, where an authoritarian ruler imposed his crackpot economics on the central bank, sending inflation soaring to 80 percent.”

“Even if true, [the allegations against Cook] wouldn’t meet the standard for immediate dismissal from the Fed,” Krugman wrote. “But of course Trump’s attempt to fire Cook has nothing to do with allegations of fraud. Her real crime, in his mind, is that she isn’t an obedient minion (oh, and that she’s a black woman.) The goal of his attempt to fire her is to replace independent Fed officials with lackeys who will take Trump’s orders — not just by getting rid of Cook but by intimidating everyone else.”

What the right is saying.

• The right is mixed on the move, with some saying the allegations against Cook are grounds for removal if proven.
• Others argue Trump’s attempt to influence the Fed is no different than Democrats’ attempts to pack the Supreme Court. 

In RedState, the blogger Bonchie explored the “criminal referral” against Cook.

“Some ‘experts’ have tried to claim that Cook's situation does not fall under the guise of ‘cause’ when it comes to the authority of the president to remove Federal Reserve governors. But while the protections against removal afforded by the Banking Act of 1935 appear to extend to policy decisions, as in a governor can't be fired for not lowering interest rates, the idea that personal misconduct doesn't qualify belabors belief,” Bonchie said. “Such a position would presume that a president can't fire someone who allegedly committed fraud. That stretches whatever protections exist far past the point of absurdity.”

“Still, it likely won't be difficult for Cook to find a lower-court judge to agree with her if she chooses to contest this. It's a legal battle she very well could lose in the end, though, which begs the question of whether it's smart to poke the bear. Her firing doesn't change the fact that she's under criminal investigation. Antagonizing the administration by suing over her removal won't do her any favors.”

In The Hill, Merrill Matthews said “Fed packing is no better than court packing.”

“Last year, Democrats and their media mouthpieces engaged in a steady, months-long stream of accusations of wrongdoing by certain conservative Supreme Court justices. Democrats wanted to pressure those justices to resign or even to impeach them,” Matthews wrote. “Now, it appears the scenario has flipped. President Trump and some in his administration are trying to do something similar, only to Federal Reserve Bank governors. Court-packing was wrong when Democrats tried to do it, and Fed-packing is wrong when Republicans try to do it.”

“Even if Trump succeeds in firing Cook, it might not change the Fed’s interest-rate decisions. The Federal Open Market Committee that handles Fed policy decisions has changed its decision-making process over the years. But the modern structure has ‘12 voting positions… comprising the seven members of the Board of Governors and five of the 12 Federal Reserve Bank presidents,’” Matthews said. “It’s hard to see Trump’s smear campaign as anything more than a desperate effort to gain control over the Federal Reserve Bank and its policymaking process — which is exactly what the Fed’s enabling legislation was intended to prevent. ”

What financial writers are saying.

• Many financial writers express concern about how Cook’s attempted firing will impact Fed independence.
• Some note the muted market reaction, suggesting this move is not the five-alarm fire some are making it out to be. 

The Financial Times editorial board argued Trump’s “intensifying assault on central bank independence risks backfiring.”

“The assumption that the Fed will set rates based on its own economic judgments has been dealt a severe blow by Trump’s determination to undermine it… But by undermining the central bank’s credibility he risks making the economic situation worse,” the board wrote. “Even if [Cook] is found guilty of falsifying mortgage statements it is unclear if the courts will deem that sufficient for her to be fired. But, if they did, it could erase any notion that the Fed is independent.”

“In the interim, investors are increasingly pricing in the possibility of a captured Fed. Following Trump’s announcement on Cook, 30-year bond yields — which have remained uncomfortably elevated in the president’s second term — nudged higher. The dollar weakened further too,” the board said. “These market moves are ultimately counter-productive for the president. Higher long-term bond yields push up mortgage rates and public borrowing costs. A weak dollar adds to imported price pressures. If households and businesses expect the president will relentlessly undermine the Fed to get rates down, their inflation expectations may increase. That raises the chances of tariff-related price increases becoming entrenched.”

In a post on X, Justin Slaughter, the vice president of regulatory affairs at Paradigm, shared his thoughts on the attempted firing.

“The Cook attempted firing will be litigated quickly but not as quickly as folks seem to think. This process will take [a] few weeks even to wind its way to the Supreme Court on whether the firing will be stayed pending litigation. Cook’s vote for September’s rate meeting will likely not be officially counted,” Slaughter wrote. “Any message that this attempted firing is illegitimate isn’t breaking through outside of academic/Dem circles. Talking to a few traders, Cook claiming two residences as primaries reads as an actual reason to relieve her for cause. The idea this action is beyond the pale just isn’t the baseline take.”

“This act is a step towards the end of Fed independence but not yet regarded as the main event. Meanwhile, there’s no other global market as good as America even now… In fact, [the] dollar dropping even with bond yields rising is probably going to help the Trump Admin’s goal of a somewhat weaker dollar,” Slaughter said. “More than anything else so far, this fight over the Fed independence is the Dems best chance to effect a rapprochement with the business community. But so far, they’re blowing it. All the messaging targeted at business seems to either be scolding the markets for not selling off more or suggesting this attempted firing is neoliberalism. It speaks to the degree to which Dems have lost the muscle memory to engage with the private sector at all.”

My take.

Reminder: “My take” is a section where I give myself space to share my own personal opinion. If you have feedback, criticism or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

• It’s not clear to me that these allegations are reason enough to fire Cook, even if they’re true.
• It’s also not clear whether Trump can legally fire her based on this claim alone.
• What is clear is that Trump is trying to bend the Fed to his will, which seriously undermines its efficacy as an independent body.

Let me lead with a straightforward question:

If Lisa Cook provided false information on one or more mortgage applications, is that enough cause to fire her?

So many people are spending so much time debating other things here: Is Trump trying to pressure the Fed to lower interest rates by firing Cook? If so, would that even work? What happens to the future of the U.S. economy if markets don’t believe the Fed is independent? What happens if Cook digs in and this becomes a true standoff (as seems likely)? Why is Trump suddenly using mortgage fraud as a go-to accusation to attack all his enemies? Is the evidence against Cook strong?

These are all good, interesting and important questions. The most pertinent point to me, though, is that even if Cook is guilty of the crime Trump says she is, I don’t know if that’s enough reason for the president to fire her, logically or legally. The Supreme Court has been pretty clear that Trump can’t remove Cook without cause, and whether lying on a mortgage form would qualify as “cause” is legitimately unclear. The actions at the root of the allegation happened before Cook was even in her post at the Fed, and they have nothing to do with the duties of her job. 

Of course, Trump’s allegation remains unproven at this point — and it’s the same one his administration has used against Sen. Adam Schiff (D-CA) and New York Attorney General Letitia James (D). Also, as I wrote yesterday, this alleged wrongdoing is pretty similar to the fraud Trump himself has been found liable for as a real estate mogul (inflating his assets or falsifying business records for favorable loan terms). Cook has not been convicted of, or even charged with, any crime — and until that happens, the hypothetical I raised above is moot. Trump can’t fire her on the suspicion of wrongdoing, and the courts need to take up Cook’s lawsuit quickly and make that point crystal clear.

All of this should elicit two major concerns from the voting population (none of which, by the way, has anything to do with Cook being black — which some Democrats can’t help but focus on). 

First, the independence of the Federal Reserve now hangs in the balance. You’ve probably heard that the Fed Board is one of the last remaining politically independent institutions, and that is, for the most part, true. The Federal Open Market Committee’s system is key: Its 12 seats are filled by five of the 12 regional bank presidents and seven appointed governors who serve on staggered terms. Governors cannot be removed for their policymaking decisions, which protects their autonomy.  

Let’s not play dumb here: Trump did not run some fraud dragnet through the Fed that Cook got caught up in; the director of the Federal Housing Finance Agency leveled this claim against Cook, and Trump is running with it, hoping to bend the institution to his will. 

If the independence of the Fed is lost, we’re in big trouble. Global markets rely on the Fed being insulated from political pressure, and our market entrusts the Fed with containing inflation; if the Fed’s independence is lost, the way its decisions are interpreted will change, and the individual decisions that comprise our market will change as well. The 30-year Treasury bond went up after Trump moved to fire Cook — a signal the market was worried the Fed might soon falter in its responsibility. 

Second, but most importantly, this move is the latest worrying development in a pattern of Trump tactics. Trying to remove someone who isn’t delivering what he wants is not a new frontier for Trump — but doing it at the Fed is novel. And the sum total of his actions this term make me wonder whether he sees any real limits on his power: arresting and deporting noncitizens for speech, deploying or threatening to deploy active-duty military in major U.S. cities to quell crime, promising to arrest and prosecute some of his top political foes, threatening lawsuits against the free press, forcing universities and law firms to settle lawsuits to retain federal funding, massively escalating the gerrymandering race that will further reduce our ability to pick our own representatives, and (perhaps most worryingly) threatening to take greater federal control over elections. 

Last week, when Trump announced he will attempt to end mail-in voting, he described states’ constitutionally mandated electoral control this way: “Remember, the States are merely an ‘agent’ for the Federal Government in counting and tabulating the votes. They must do what the Federal Government, as represented by the President of the United States, tells them.”

Now, Trump is trying to fire a member of one of the most politically independent deliberative bodies and most important financial institutions in the world — all at a time when he is pressuring that financial institution to make a policy decision it has so far resisted making. No corner of American life appears off limits to the president’s personal influence.

None of that is a statement in favor of liberal politics (in fact, decrying federal power is a classic American conservative principle) — nor is it an endorsement of the Democratic Party. You can think Democrats are a corrupt party that tried relentlessly to imprison and destroy Trump with every dirty political trick in the book and still criticize Trump’s actions as president. You can believe Trump is the greatest president we’ve ever had — a once-in-a-generation, norm-breaking, peace-brokering voice of the common man who just pulled us back from the brink of our own destruction by simply winning in 2024 — and still believe he is drunk on power and going too far. You can believe he has the right stance on literally all of our biggest issues, desperately want to see him succeed on his policy prescriptions, and still question the precedents he is leaving for the next president — the one who doesn’t see the world how he does — and consider how dangerous this all might be.  

All throughout the 2024 campaign, Trump promised to get revenge on his political enemies — arrests, prison time, charges of treason. At the same time, he assured us of a new Golden Age under his leadership. So far, I’ve seen far more focus on revenge than ushering in that Golden Age, and I’m left feeling more convinced than ever that presidents — past, current, and future — have far too much power and far too few constraints for a country that was built on a desire to democratize power towards the many and away from the few. 

Love or loathe him, the public should feel compelled to draw lines in the sand on what we’ll tolerate from our increasingly powerful presidents — and we should be able to see and state clearly that Trump is crossing those lines. 

Take the survey: Do you think Trump has legal cause to fire Cook? Let us know!

Disagree? That's okay. My opinion is just one of many. Write in and let us know why, and we'll consider publishing your feedback.

Your questions, answered.

Q: What happens if a large majority of voters changed their party to independent? Would that cause no one to be able to figure out how to gerrymander the vote?

— Anonymous from Minneapolis, MN

Tangle: That’s an interesting strategy, but it probably wouldn’t work. Mapmakers can gerrymander districts based just off of demographic data from the Census, which can serve as a proxy for how citizens will vote. In 2022, Alabama redistricted in such a way that gave only one of its districts a black majority (~14% of its seven districts), despite 27% of the state's residents being black. Since black voters in Alabama are predominantly Democrats, this functioned as a partisan gerrymander.

Now, Alabama’s map was eventually tossed for this reason. However, the case proves the rule: Partisan mapmakers don’t need to use party affiliation to gerrymander effectively. 

In fact, party registration might not even be the best tool for the job. Voter rolls from previous elections show not only which party citizens voted for, but which citizens voted. Mapmaking committees can even consider consumer purchasing habits from data accrued from private vendors — a credit card statement showing a donation to Planned Parenthood or the NRA can allow partisan gerrymanders to be effective down to the individual (we’re going to cover what data the government has about you in detail this Friday).

Basically, Republicans or Democrats can easily gerrymander based on what they know about independent voters. In a previous edition on election reform, we described how open primaries and other electoral reforms could actually be the best ways to curtail gerrymandering.

Want to have a question answered in the newsletter? You can reply to this email (it goes straight to our inbox) or fill out this form.

Under the radar.

On Tuesday, Commerce Secretary Howard Lutnick said that leaders at the Pentagon are discussing whether to take equity stakes in leading U.S. defense contractors, such as Lockheed Martin. The comments follow President Donald Trump’s announcement of a deal with chipmaker Intel granting the government a 10% stake in the company; Trump has said he is open to similar deals with other companies. “There’s a monstrous discussion [at the Pentagon] about defense,” Lutnick said on Tuesday. “But what’s the economics of that? I’m going to leave that to my secretary of Defense and the deputy secretary of Defense.” CNBC has the story.

Numbers.

• 7. The number of members, or governors, on the Federal Reserve’s Board of Governors. 
• 14. The length, in years, of a Fed governor’s term. 
• 2022. The year that President Joe Biden appointed Lisa Cook to serve on the Federal Reserve’s Board of Governors. 
• 51–50. The Senate’s vote to confirm Cook to the board (with Vice President Kamala Harris as the tie-breaking vote).
• 2038. The year Cook’s term on the board expires.
• 20. The number of days until the Federal Open Market Committee’s next meeting, beginning on September 16. 
• 36 of 50. The proportion of economists surveyed in a July 2025 Reuters poll who said they were worried about the Fed's independence from political influence. 
• 14 of 50. The proportion of economists who said they were not worried about the Fed's independence from political influence.

The extras.

• One year ago today we wrote about the arrest of Telegram’s founder.
• The most clicked link in yesterday’s newsletter was the wildfires in Oregon and California.
• Nothing to do with politics: Why Will Smith’s real crowds look like AI slop.
• Something to do with politics: For the first time in 30 years, the American Academy of Pediatrics released vaccine guidance that significantly differed from the government’s. So what happened? Senior Editor Will Kaback breaks it down in an Instagram reel. 
• Yesterday’s survey: 2,214 readers responded to our survey on Donald Trump’s civil fraud case with 49% supporting the courts upholding all current penalties against him, plus a significant fine. “Way too many people thinking a penalty being ruled excessive means it will go away, that’s not how this works,” one respondent said.

Have a nice day.

Restaurateur Tommy Fello suffered a stroke on Christmas Eve, causing a loss of feeling across the left side of his body that persisted even after physical and occupational therapy. Then, another patient recovering from a stroke suggested he look into a new technology — called the Vivistim System — which stimulates the vagus nerve (the body's longest cranial nerve) during rehabilitation to improve hand and arm function for stroke victims. Since starting the treatment, Fello’s doctor says his mobility has significantly improved and his pain has subsided. “I'm very, very happy to do it, very proud to do it, and I'm glad I did it,” Fello said. CBS News has the story.

Don’t forget...

📫 Forward this to a friend and tell them to subscribe (hint: it's here).

🛍 Love clothes, stickers and mugs? Go to our merch store!