Trump increases pressure on central bank, but that is not without risk

This article was last updated on August 27, 2025

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Trump increases pressure on central bank, but that is not without risk

The intended dismissal of the American bank director Lisa Cook is a “shocking attack on the independence of the Central Bank”. That says Nout Wellink, former CEO of De Nederlandsche Bank. Five questions about this striking decision by President Trump.

What exactly is going on?

Lisa Cook is by the president accused of mortgage fraud. That accusation is originally from Bill Pulte, the boss of the FHFA, a kind of financial watchdog for mortgages. Pulte is a Trump trailer. He previously accused other political opponents of mortgage fraud.

Based on the accusation, Trump says he has enough evidence to dismiss Cook.

The fraud would be a mortgage application that Cook made years ago, before she got the top job at the central bank. There is an investigation into the accusations against Cook.

Why does Trump get involved with the central bank?

When Cook is gone, Trump has appointed a majority of the drivers of the US Central Bank. They vote on any interest rates.

Correspondent vs Rudy Bouma:

“Trump is involved with the central bank because he wants to see the interest rates lowered. The interest charges of the US government are towering because of the enormous national debt. It will only rise further in the coming years due to Trumps tax cuts and increased defense expenses.

Trump has the past six months all his arrows targeted On chairman Jerome Powell whom he calls a “a complete failure” and “a stupid head” that is “too late”. Trump believes that Powell should resign immediately.

But Trump cannot get Powell away before his term expires mid -May 2026. That is why he throws it over at Powell: Trump blames him for the expensive one renovation From his head office.

Co-driver Adriana Kugler already left and was immediately replaced by a Trump-Loyalist. Now it looks like Lisa Cook.

The American law provides that the White House cannot influence the Fed, but Trump is now also gnawing on this traditionally strictly independent bastion. “

How special is this dismissal?

It is not often that politics exerts pressure to get bankers away. A few years ago, Turkish President Erdogan dismissed multiple High bank officials. In 2010 dislocated The Argentinian president the chairman of the central bank in the country. That decision then came to criticism, because of the political interference in the economy.

“If anyone treated my colleagues like that, I might hesitate to lower interest rates rather than usual,” says Nout Wellink, who was chairman of DNB, the Dutch Central Bank for fourteen years. In his time as president, the independence of the Central Bank was widely praised.

What effect does this have on the global economy and the Dutch?

All pressure from Trump could ultimately take care of the opposite effect, warns Jos Versteeg, analyst at Private Bank Insingergilissen. “The financial markets are running for trust. The more Trump interferes with the FED, the more investors will doubt. That can ensure higher inflation and that in turn ensures a higher long -term interest rate.”

Although the American capital market is the largest in the world and our economies are intertwined, we have little trouble in Europe for the time being the unrest on the other side of the ocean. The US was always a safe haven to do business with. “If there is serious doubt about that, the dollar goes down and interest rates,” says Analyst Versteeg.

A low dollar can quickly have an effect on European companies that have a lot to do with the United States. “Like Ahold. It has to do with less income due to the weak dollars.” Too strong euros is not necessarily good, because then it will cost much more for Americans to import European items. For European tourists traveling to the US, the weak dollar is nice, because they get more dollars for their euro.

How to proceed?

Cook itself has indicated not to give up her job. Officially she can perform her work until 2038.

If Trump succeeds in finally fire Cook, he can appoint someone who is loyal to him. “But not every madman can be named,” says Versteeg. “The Senate still has to approve a nomination.”

Former banker Wellink also sees that. “The outcome is not yet certain. But at some point it can lead to a shock in the entire financial being, with all its consequences.”

De Nederlandsche Bank does not want to say anything about developments in the US.

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