The Federal Reserve Board of Governors Cook sues Trump: the battle for Central Bank independence has begun, and expectations for a rate cut in September are heating up in the crypto market.

Federal Reserve Board member Lisa Cook has formally filed a lawsuit against President Trump, attempting to remove her from office based on his alleged mortgage fraud. She seeks a court ruling to confirm her membership in the Federal Reserve Board and to issue injunctive relief. This case is based on the provision in the Federal Reserve Act that the president can only remove a Federal Reserve governor for “good cause” and could become a historic case in defending the independence of the Federal Reserve. The incident occurred on the eve of the September FOMC meeting, with the market expecting an 83.2% probability of a rate cut, which, if realized, would be favorable for the risk sentiment in the crypto assets market.

[Core Legal Disputes in Litigation]

Cook, through attorney Abbe Lowell, claimed that the President’s decision to remove him lacks factual and legal basis. The lawsuit emphasizes that the Federal Reserve Act clearly states that the President can only remove a member of the Federal Reserve Board of Governors for “just cause,” and the “unsubstantiated allegations” regarding Cook’s private mortgage application prior to taking office do not meet the legal standard. Furthermore, Trump’s actions are alleged to violate Cook’s due process rights granted by the Fifth Amendment of the Constitution and the hearing rights provided by the Federal Reserve Act.

[Timeline of Historic Judicial Showdowns]

Judge Jia Cobb of the Federal District Court for the District of Columbia has scheduled the first hearing for this Friday. The case is significant—if the president can arbitrarily replace members of the Federal Reserve Board of Governors, it will undermine the independence of the central bank’s monetary policy. Notably, this is the first time in U.S. history that a president has attempted to remove a member of the Federal Reserve Board of Governors, and the ruling will set an important precedent.

[Political Motives and Interest Rate Policy Game]

Analysis suggests that Trump’s move is aimed at exerting pressure on the Fed to cut interest rates. If Cook is successfully replaced, the president will gain an additional nomination slot on the board, allowing him to appoint members who support rate cuts. Although Fed Chairman Powell has signaled a rate cut in September (CME FedWatch data shows an 83.2% probability of a 25 basis point cut), Trump wants to ensure everything is foolproof—his nominee Stephen Miran is expected to receive Senate confirmation before the September meeting, taking over from the outgoing Adriana Kugler.

[Impact Mechanism on the Crypto Assets Market]

Interest rate policy is strongly correlated with the cryptocurrency market: a rate cut can enhance market risk appetite and increase liquidity injection into Crypto Assets. Trump has publicly called for a 300 basis point rate cut multiple times, referring to it as “rocket fuel for the U.S. economy.” If the September FOMC meeting proceeds with a rate cut as expected, it could drive up the prices of Bitcoin and other Crypto Assets. The current political pressure combined with legal disputes has instead strengthened market expectations for an easing monetary policy.

[The Deep Significance of the Fed’s Independence Defense]

This case is not only related to individual job positions but also involves the core of the U.S. central banking system—whether monetary policy decisions should be subject to political interference. Cook’s decision to collectively list the Federal Reserve Board of Governors as co-defendants indicates that this move has received internal support from the central bank. The ruling will directly affect the future boundaries of presidential intervention in monetary policy in the United States and will have a demonstrative effect on the governance models of central banks globally.

[Conclusion]

The rare dramatic event of a Federal Reserve Board of Governors suing the president reveals the politicization risks of U.S. monetary policy-making. For crypto assets investors, the probability of an interest rate cut at the September FOMC meeting has formed favourable information due to rising political pressure, but in the long term, attention must be paid to the impact of the Federal Reserve’s compromised independence on the dollar’s credit system. It is recommended to closely monitor the results of the hearing on Friday and the September interest rate decision, and to be wary of market fluctuations that may arise from political uncertainty. This historic judicial showdown may ultimately reshape the boundaries of the relationship between central banks and executive power, having a profound impact on the global financial system.