Senate Republicans are bracing for chaos over President Donald Trump's efforts to take control over the Federal Reserve.
More than a dozen Trump administration officials and Republican lawmakers still enjoying their August recess told CNN they had no idea the president would attempt to fire one of the central bank's governors, Lisa Cook, for the first time in history, but some administration insiders say the signs were obvious.
“The president said he’d do this if she didn’t resign,” said one Trump administration official. “Well, she didn’t resign.”
Trump fixated on ousting Cook after Bill Pulte, a loyalist installed as director of the Federal Housing Finance Agency, publicized mortgage fraud allegations against her on social media and television that resembled similar allegations he's made against other Trump foes, including Sen. Adam Schiff (D-CA) and New York Attorney General Letitia James.
“The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” White House spokesman Kush Desai told CNN in a statement.
Attorneys for Schiff and James called the allegations – which haven't even resulted in formal charges – “the very definition of weaponization of the justice process," but the president has seized on the accusations as justification to take control over the Federal Reserve by announcing that he'd fired Cook, who is now challenging that move in court.
"It also capped what multiple Trump officials have described as a remarkable sequence of events that led to the moment, beginning on August 1 with the arrival of a resignation letter addressed to Trump from another Biden-appointee to the Federal Reserve Board nearly six months before the end of her term," CNN reported.
"Adriana Kugler’s decision to leave the Fed, which was announced publicly a few hours later that Friday afternoon, came as a surprise within the Fed and inside the West Wing, three people familiar with the matter said," the network added. "Trump was thrilled, one said."
That open seat gives Trump a chance to add two allies to the seven-member Board of Governors before a critical meeting next month to vote on lowering interest rates, which the president has made clear he wants, and he's already elected Stephen Miran, his chief economist and the intellectual architect of his tariff strategy, to replace Kugler.
"People close to Trump told CNN that, unlike during his first term when he was surrounded by advisers who held him back, he is more emboldened than ever to push the bounds of his executive authority — especially on issues where he views the end result to be worth it," CNN reported.
Trump aides have been laying the groundwork to get Miran in place before the Federal Open Market Committee on Sept. 16, and Senate Republicans are wary of what's awaiting them when they return from their August recess.
“Honestly, what the hell happens now,” said one longtime senior Senate Republican aide in an unsolicited late-night message to CNN. “We just jumped into the unknown.”