In a week marked by high-stakes legal battles and escalating political rhetoric, the independence of the Federal Reserve has come under unprecedented scrutiny as President Donald Trump intensifies his campaign to reshape U.S. monetary policy. The drama reached a boiling point on Tuesday, September 9, 2025, when a federal judge blocked Trump’s attempt to remove Lisa Cook from the Fed’s Board of Governors, even as billionaire Republican megadonor Ken Griffin publicly warned against the president’s relentless attacks on the central bank’s autonomy.
Griffin, founder and CEO of the hedge fund Citadel and one of the world’s wealthiest individuals, co-authored a pointed opinion piece in The Wall Street Journal on Sunday, September 7. Alongside University of Chicago professor Anil Kashyap, Griffin cautioned that Trump’s strategy of publicly criticizing Federal Reserve Chair Jerome Powell and pressuring the central bank to cut interest rates could have “steep costs.” The op-ed, which quickly reverberated across financial and political circles, argued, “The president’s strategy of publicly criticizing the Fed, suggesting the dismissal of governors, and pressuring the central bank to adopt a more permissive stance toward inflation carries steep costs.”
According to USA Today, Griffin and Kashyap warned that undermining the Fed’s independence risks stoking higher inflation, raising long-term interest rates, increasing market risk premiums, and weakening investor confidence in U.S. institutions. “It is in the president’s best interest for the Fed to be seen as independent—and to act independently. That independence gives the central bank space to make difficult choices required to curb inflation,” they wrote. “Credibility in economic policymaking is built slowly, through practice and respect for processes, and can be lost quickly if those processes are disregarded. Once lost, it is costly and time-consuming to rebuild. Protecting it must remain the central priority of U.S. economic policy.”
The op-ed came as Trump ramped up his attacks on Powell, calling him “slow,” “incompetent,” and “politically motivated” in a series of Truth Social posts. The president has repeatedly demanded significant interest rate cuts and called for Powell’s resignation, moves that have rattled both Wall Street and Washington. According to Fox Business, Griffin, who reportedly donated hundreds of millions of dollars to conservative causes in the most recent election cycle, joined a growing chorus of traditional Republican backers voicing alarm over Trump’s approach. When reached for further comment, Griffin declined to elaborate.
The tension spilled over into the courts this week. Late Tuesday, Judge Jia M. Cobb of the U.S. District Court for the District of Columbia temporarily blocked Trump from removing Lisa Cook from the Fed’s Board of Governors, allowing her to continue serving as she contests her dismissal. Trump had attempted to fire Cook over allegations she falsified mortgage documents—allegations stemming from actions before her 2022 appointment by President Joseph R. Biden Jr. Cook’s lawyers have framed the attempted ouster as politically motivated, pointing to Trump’s desire to install loyalists at the Fed who would aggressively cut interest rates.
Judge Cobb’s ruling was unequivocal: “The best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties. ‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office.” The decision marked only the opening salvo in what is likely to be a protracted legal battle over the president’s authority to remove Fed officials, with Justice Department lawyers arguing that the president has broad powers and that courts should defer to his interpretation of “cause.”
Beyond the courtroom, the political and economic stakes are enormous. On FOX Business’ “Kudlow,” economist Steve Forbes argued, “They’ve got to get these contradictions out of the way. … They’ve got to be firm about it, because if [Trump] and the Federal Reserve then said, ‘We want a stable dollar,’ I think you’d see the dollar go up in value for the right reasons, and you’d be able to do more interest rate cuts.” Economist Mohamed El-Erian added, “The deficit is one thing, but, most importantly, is how attractive is the U.S. to foreign investment? And this is really important. We are right now at the forefront of transformational innovations. We are leading the world in those innovations. … They can fundamentally change our growth trajectory.”
The international community is also watching closely. European Central Bank President Christine Lagarde warned in a radio interview last week that undue interference in the Federal Reserve’s operations could pose serious global risks. “If U.S. monetary policy were no longer independent and instead dependent on the dictates of this or that person, then I believe that the effect on the balance of the American economy could, as a result of the effects this would have around the world, be very worrying, because it is the largest economy in the world,” Lagarde said.
Economist and professor Peter St. Onge explained the deeper implications on FOX Business’ “Making Money with Charles Payne,” noting, “What’s happening here is that Fed supporters are concerned there could be structural damage to the Fed in this back-and-forth between Trump and Powell. So, in other words, Trump might keep Powell, but he might clip the wings of the Fed, transfer some of its oversight and maybe some of its monetary discretion over to the Treasury, where, of course, it has more voter oversight.” He added, “It’s not so much that they’re admitting Trump is right, it’s that they are seeing the bigger threat to the Fed’s sort of control over the economy.”
For its part, the White House has defended Trump’s actions as necessary to tame inflation and boost economic growth. Spokesperson Kush Desai told Fox News Digital on Tuesday, “The Federal Reserve’s stated objective is to set monetary policy based on what the data show, and the data clearly show that the Trump administration’s policies have swiftly tamed Joe Biden’s inflation crisis. The president and the financial markets have their view clear that the Fed should respond to this objective fact by cutting rates, delivering needed interest rate relief to American families while supporting economic and employment growth.”
Griffin, however, maintains that an independent Fed is only part of what’s needed to restore America’s economic strength. In his Wall Street Journal op-ed, he urged the president to press Congress to reduce government spending and pursue reforms that would raise long-term growth potential. “To put the nation on a better trajectory, the president should press Congress to reduce government spending and advance reforms that raise long-term growth potential. … Congress must summon the will to halt the surge in the ratio of debt to gross domestic product while structural reforms—targeted deregulation and investment in human capital—reinforce the effort. And an independent Fed must have space to pursue its dual mandate with resolve, restoring inflation to 2% while safeguarding employment.”
As the legal battle over Lisa Cook’s removal unfolds and the debate over the Fed’s future rages on, the stakes for the U.S. economy—and its global standing—have rarely felt higher. The coming months promise further clashes over the balance between presidential power and institutional independence, with lasting consequences for American monetary policy.
