• Trump said on Truth Social on Monday that he was removing Fed Governor Lisa Cook.
• The president previously called on Cook to resign.
• Cook said last week that she wouldn't be "bullied" out of her position.

President Donald Trump just said he removed a key official at the Federal Reserve, and it wasn't Jerome Powell.

Trump said in a letter posted to Truth Social on Monday that he was removing Fed Governor Lisa Cook, citing recent allegations made against her by Bill Pulte, director of the Federal Housing Finance Agency.

Pulte, in a letter to the attorney general posted on X last week, accused Cook of making at least one false statement on mortgage agreements by having mortgages on two properties in two different states and describing both as her primary residence.

"Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately," the letter posted to Truth Social reads.

Markets reacted immediately as investors questioned the Fed's independence. The US Dollar Index was 0.2% lower at 10:14 p.m. ET, and benchmark 10-year Treasurys were also lower.

US futures were lower:

• S&P 500 futures: down 0.1% at 6,446.50
• Nasdaq futures: down 0.2% at 23,446.25
• Dow futures: down 0.1% at 45,307.00

Haven assets rose as investors rushed to safety. Gold was 0.3% higher at around $3,376 per ounce, and the Japanese yen rose 0.2%.

Supreme Court collision course

Trump's decision to try to fire Cook puts him on a collision course with the Supreme Court, which has so far given him the green light to fire members of independent agencies.

A president can only remove a Federal Reserve governor for cause. Earlier this year, the Supreme Court allowed Trump to temporarily remove members of the National Labor Relations Board and the Merit Systems Protection Board while further litigation played out over whether presidents have the power to remove them without cause.

In one of those opinions, the conservative majority said the removals would not "implicate the constitutionality of for-cause removal protections" for Federal Reserve members because of the agency's "distinct historical tradition."

"The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States," the unsigned opinion said.

Last week, in response to Trump's calls to resign, Cook said, "I have no intention of being bullied to step down from my position because of some questions raised in a tweet," according to a statement issued by the Fed.

The statement continued, "I do intend to take any questions about my financial history seriously as a member of the Federal Reserve, and so I am gathering the accurate information to answer any legitimate questions and provide the facts."

The Fed is scheduled to meet in less than a month. Its rate-setting Open Markets Committee has provisions to allow for alternate voters when a governor or a member of the panel misses a vote. It remains unclear how the Fed will proceed.

Last week, Powell said that the Fed would always make rate-setting decisions solely based on the judgment of the needs of the broader economy to balance inflation and unemployment — a once perfunctory message that has taken on renewed relevance amid Trump's frequent efforts to cajole the Fed into cutting rates.

"FOMC members will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks," Powell said during his closely-watched speech during an economic policy summit in Jackson Hole. 'We will never deviate from that approach."

The White House and the Federal Reserve did not immediately respond to a request for comment from Business Insider.

Correction: August 25, 2025 — This story was corrected to include the correct spelling of Bill Pulte's last name. It is Pulte, not Plute.

• China's focus on EVs and AI industries is facing challenges amid price wars and overcapacity.
• Chinese leader Xi Jinping recently questioned if all of China should focus on the same high-tech sectors.
• China's top leadership has pledged to address intensive hyper-competition and price wars.

China bet big on electric vehicles and artificial intelligence — but now its top leader is starting to question whether that bet has gone too far.

On Monday, Chinese leader Xi Jinping questioned the country's single-minded focus on a few high-tech sectors.

"When it comes to new projects, it's always the same few things: artificial intelligence, computing power, and new energy vehicles," Xi said at a meeting about urban development in Beijing, the Chinese Communist Party's People's Daily reported on Thursday.

"Do all provinces in the country have to develop industries in these areas?" Xi asked.

Xi's unusually blunt remarks questioning China's industrial strategy come as the country's top leadership recently pledged to curb intense "involutionary" competition. The remarks show a shift from Beijing's usual pushback against Western criticisms over industry overcapacity and cheap exports.

The comments reflect growing concerns that China's pursuit of dominance in EVs and AI may be backfiring economically and politically.

'Involution' and a deflationary trap

The hyper-competition has become especially acute in the EV sector, where an intense price war has squeezed margins and raised alarms about long-term sustainability.

Beijing is now encouraging market consolidation and cracking down on unhealthy practices. These include abuses such as "compelling businesses to sell goods on a below-cost basis," wrote Lynn Song, ING's chief economist for Greater China, last week.

This comes as deflationary pressure is worsening. China's producer price index, or PPI fell 3.6% in June, the steepest drop in nearly two years.

That's not just bad news for businesses and China's economy. It also risks fueling trade tensions as Chinese exports become cheaper and flood global markets.

China posted GDP growth of 5.3% in the first half of the year. Much of the momentum is likely driven by export frontloading ahead of new US tariffs and temporary consumption subsidies.

Beneath the headline numbers, the Chinese economy remains under strain as consumer confidence remains depressed and youth unemployment stays high.

"It appears the persistent PPI deflation has finally caught the attention of the top leadership in Beijing," wrote economists at Nomura last week.

• President Donald Trump has threatened 10% tariff on countries aligning with BRICS policies.
• A BRICS statement from the group's annual meeting voiced concerns about tariffs and the Gaza war.
• Trump has previously targeted BRICS, threatening a 100% tariff rate on countries seeking to ditch the dollar.

President Donald Trump has issued a new tariff threat.

"Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff," Trump wrote in a post on Truth Social on Sunday night.

"There will be no exceptions to this policy," he added.

Trump's comments come amid a two-day BRICS summit in Rio de Janeiro. The group of emerging nations includes key members Brazil, Russia, India, China, and South Africa.

On Sunday, the BRICS group issued a statement expressing "serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules."

The group also condemned US and Israeli military strikes on Iran, a BRICS member. It called for negotiations to achieve a ceasefire and a full withdrawal of Israeli forces from the Gaza Strip.

"We reiterate our grave concern about the situation in the Occupied Palestinian Territory, with the resumption of continuous Israeli attacks against Gaza and obstruction of the entry of humanitarian aid into the territory," the statement said.

Not Trump's first BRICS tariff threat

It's not the first time Trump has taken aim at BRICS.

In December, he threatened a 100% tariff on countries pursuing alternatives to the US dollar. Economists said at the time that the move could backfire.

Even so, BRICS nations have been exploring alternatives to the US dollar. De-dollarization discussions accelerated after sweeping sanctions against Russia over its full-scale invasion of Ukraine in February 2022.

On Sunday, the BRICS group said it would continue discussing a cross-border payments system among member states.

Trump's threats of even more tariffs on countries aligning with BRICS come ahead of his administration's plans to send letters to trading partners informing them of new tariff rates on their imports to the US.

Trump said in a separate post that the letters would be delivered starting at noon ET on Monday.