Trump is trying to fire a Fed governor. Here's what happened when other countries' presidents did the same thing.

8.26.25
President Donald Trump is trying to oust Federal Reserve Gov. Lisa Cook — and if he succeeds, it could mean bad news for your wallet. While Trump's closer-term aim is likely to pressure the Fed to lower interest rates, international historical precedent shows that the longer-term result of a president sacking central bank officials could be both higher rates and higher inflation. In Turkey, for instance, President Tayyip Erdogan fired Naci Agbal, the country's central bank chief, in 2021. Reuters reported that a hefty interest hike was "the last straw" for Erdogan. In the wake of the firing, the value of Turkey's lira tumbled, and inflation spiked. In 2010, a similar showdown occurred in Argentina, when President Cristina Fernández de Kirchner attempted to fire central bank president Martín Redrado over his refusal to release reserve funds to pay down international debt. Inflation spiked in the country, even as the government reportedly underreported rates of price hikes.

But cutting rates in the US too hard and too early — especially when inflationary pressures like a still-robust labor market and tariffs linger — could lead to a resurgence of price hikes. Already, there's been some modest economic fallout from Trump's move — and that might only continue. "The dollar has weakened, which is taking purchasing power out of your pocket mechanically, and we've seen the 30-year treasury rise, so that means more expensive mortgages," Jacquez said. He said it's a "frog boiling in the water moment" for the market. "They have been desensitized to everything Trump has done, but there will come, I believe, a tipping point here.

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