At 8:02 AM Beijing time on August 26, Trump signed a document to remove Federal Reserve Board member Cook. Some friends said the market decline was due to this reason. Judging by the timing, although there was indeed a maximum fluctuation of $2,000 in BTC around that time in the morning, it should not be the main reason for the decline. The main decline occurred during the early hours when U.S. stocks accelerated their drop, starting around 3:30 AM.

Of course, the analysis from friends is correct. Trump directly targeting a Federal Reserve Board member would raise doubts about Trump's authority among the public. If the president can arbitrarily remove Federal Reserve Board members, it would mean that anyone who disobeys Trump could be removed, leading to concerns about the Federal Reserve's independence. However, there is actually no need to worry.

About three hours later, the removed Federal Reserve Board member Cook issued a statement saying that Trump does not have the power to remove him and that he would not resign. So, does the U.S. President have the power to remove a Federal Reserve Board member?

The answer is yes, the president does have the power to remove them, but there must be sufficient reasons.

In the removal document signed this time, Trump's reason was that Cook is alleged to have been involved in "mortgage document fraud," which is consistent with the provisions of the Federal Reserve Act. However, the precondition is that judicial review must be conducted and confirmed before removal can occur. In other words, Trump currently does not have the power to remove Cook from his position.

Only after a court investigation confirms that Cook is indeed guilty of "mortgage document fraud" can Trump exercise his presidential power to remove Cook from his position. Does Trump know this? I think he must know. But if Trump clearly knows he cannot do this, why did he still do it?

There is only one truth: time is running out for Trump. Trump still does not have enough support within the Federal Reserve, so he needs to use such executive orders to pressure the Federal Reserve internally. If the Federal Reserve does not enter a cycle of continuous interest rate cuts, all board members who do not support rate cuts may face investigations from Trump. If any of them have skeletons in their closet, they could be fired by Trump.

Indeed, Trump is interfering with the Federal Reserve's independence. But such interference with independence, which might have been a major drawback in the past, may not be so clear-cut now.