Trump Ramps Up His Fight With the Fed

Happy Friday! President Trump today named Katie Zacharia, a conservative commentator, as his next White House press secretary, replacing the departed Karoline Leavitt. Zacharia has been serving as a communications adviser for the company that operates Trump's Truth Social platform. She had been a spokesperson for the Department of Homeland Security and Trump said she had been involved in his campaigns in swing states. "She has an unblemished record of support, and has been a loyal and brilliant supporter, right from the beginning," Trump wrote. "She is, likewise, a devoted fan and member of MAGA!"

Here's what else is happening as we head into the weekend. Please note, we'll be off on Monday and back in your inboxes on Tuesday.

Trump Renews Effort to Fire Fed Governor Lisa Cook

President Trump announced Friday that he has created a new committee charged with investigating year-old allegations that Federal Reserve Governor Lisa Cook committed mortgage fraud by making false statements in one or more loan documents.

In his announcement, Trump said it is his job "to ensure the laws are faithfully executed, including by firing subordinates who cannot be trusted to tell the truth and follow the law." He asked the newly formed committee to investigate the case against Cook and report back to him whether there is "cause" for her removal.

The committee - which includes Kevin Hassett, Trump's top economic adviser; Keith Sonderling, the acting director of the Office of Government Ethics; and Andrea Lucas, the head of the Equal Employment Opportunity Commission - is empowered to consult with federal agencies and departments, including the Justice Department, during its investigation, and is tasked with holding an "in-person hearing to consider the evidence and allegations against Governor Cook" on November 5, 2026, at the White House.

An ongoing battle: The unusual move is the latest in an effort by Trump to remove Cook from the Fed board. Trump has long called for the Fed to lower interest rates, and has viewed Cook, who was appointed to the Fed by President Joe Biden, as an obstacle to achieving that policy.

Trump attempted to fire Cook last year, citing the unproven allegations of mortgage fraud, which were first surfaced by Bill Pulte, the director of the Federal Housing Finance Agency and a Trump ally. Cook sued in response, and the Supreme Court ruled in June that Trump cannot remove her while the legal issues involved are sorted out.

Trump also clashed with former Fed Chair Jerome Powell, pressuring him to lower interest rates or step aside and accusing him of mismanaging a major renovation project at the central bank's headquarters. The Justice Department dropped an investigation into the issue, and a Fed watchdog's investigation recently found that the $2.5 billion building project was poorly managed but cleared Powell and other officials of any criminal wrongdoing.

Noting that Trump has already made it clear that he wants to fire Cook, her lawyers said Friday that they have "grave doubts" about the legality and legitimacy of the new committee and its investigation. "But if it is anything close to objective," the lawyers added, "the conclusion will be that Governor Cook did not commit mortgage fraud, leaving no cause to remove her from the Federal Reserve Board."

Kathryn Judge, a Columbia University law professor, said she shares concerns about the new investigation, which she said may be an effort to create the appearance of lawfulness, even if Trump has a desired outcome heading into it. "Part of what the administration is trying to do is convince the public of the legitimacy of a process that may not be all that balanced or all that fair," she told The Wall Street Journal.

Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, was more pointed in her criticism of the investigation. "President Trump is convening an illegitimate show trial in his dangerous quest to illegally take over our nation's central bank," she said. "Instead of playing judge in a kangaroo court of his own making, Trump should end the war in Iran and cancel his chaotic tariffs."

Lawmakers Press Watchdog Agency to Sue Trump Over Funding Moves

Bipartisan lawmakers on Capitol Hill are reportedly pressuring the Government Accountability Office, their nonpartisan watchdog agency, to sue the Trump administration in a push to reassert the congressional power of the purse.

The GAO has repeatedly found that the administration violated the law by withholding congressionally appropriated funds.

The watchdog agency said last week that the White House decision to unilaterally cancel $810 million in previously appropriated funding is illegal. And it said in a report this week that the administration violated the law when it failed to spend more than $78 million in 2025 research grant funding that Congress had provided for the Agency for Healthcare Research and Quality, part of the Department of Health and Human Services. The withholding of funds came after the administration slashed staff at the health agency, including personnel responsible for grant administration. The White House insists that its budget moves are legal.

Democrats welcomed the latest GAO findings. "This decision confirms what we've long known: President Trump lit health research funding on fire last year, and it's clear as day he's just done the same again this year," Sen. Patty Murray, the top Democrat on the Senate Appropriations Committee, said in a statement. Murray noted that the White House recently announced its intention to claw back another $28 million in AHRQ funding as part of a larger pocket rescission.

Murray also called on Republicans to join in an effort to have Congress reassert its control over federal spending. "It's past time Congress imposes real consequences on this administration for killing lifesaving health research," she said.

Some Republicans are reportedly joining in that effort, pressing for GAO to sue the administration. "A Senate Republican aide confirmed there has been a push to get GAO to sue the administration, particularly after appropriators fended off an effort by the Trump administration to cut the watchdog agency's budget in half," the Washington Sun's Eric Katz reported on Thursday.

The Republican chair of the Senate Appropriations Committee has also pushed back against administration clawbacks that she calls "unlawful," and she told reporters recently that GAO can challenge the administration in court.

"They are empowered to sue," Sen. Susan Collins said, according to Politico. "I think the biggest problem is that we have an acting director of the GAO, who understandably is wary of suing the administration without direct congressional approval."

GAO's power to sue: The Budget and Impoundment Control Act of 1974 granted the comptroller general the power to sue the president over the failure to properly spend obligated funds - and a preliminary Supreme Court ruling last year suggested that only the GAO chief, and not outside groups, could bring such a legal challenge. But any push to have GAO challenge the administration in court is complicated by the agency's lack of a permanent leader since Comptroller General Gene Dodaro's term expired at the end of last year.

The process of finding a permanent comptroller general, who would be nominated for a 15-year term, involves a bipartisan, 10-member congressional commission, which is supposed to recommend at least three qualified candidates to the president, who can also request additional names. The Senate must ultimately confirm the individual nominated by the president. But in this case, the congressional commission reportedly has yet to convene to find a replacement for Dodaro.

The White House's preferred pick? The White House has floated nominating Eric Ueland, the deputy to Office of Management and Budget Director Russ Vought, to head GAO, according to the Sun's Katz. Ueland is also the acting administrator at the U.S. Agency for International Development, which the Trump administration has largely dismantled, and had been acting director of the Office of Government Ethics until last December.

Ueland would be sure to face a difficult confirmation fight if he is nominated to be comptroller general, the GAO's leader.

"If nominated and confirmed to lead the legislative branch's watchdog agency, Ueland himself would get to decide whether to hold the administration accountable for work he previously was a part of," Katz notes. He adds: "Placing a White House official into GAO leadership has the potential to end any threat of a lawsuit and to upend the watchdog agency altogether."

Chart of the Day: The Post-Pandemic Wealth Gap

Older Americans and richer ones got much richer in the years after the Covid 19 pandemic, according to data from the Federal Reserve's Survey of Consumer Finances released on Friday.

The median family net worth rose 2% from 2022 to 2025 to about $216,000, adjusted for inflation, The Wall Street Journal's Rachel Louise Ensign reports. The top 10% of earners fared much better, as their median wealth rose 31%. Meanwhile, the wealth of the bottom 40% of earners fell.

Looking at the data by age, wealth grew by 37% for Americans 75 and older, but it fell 23% for those under age 35.

Read more at The Wall Street Journal.

Fiscal News Roundup

• Trump Strikes Deal With Putin for Russian Diesel in Sharp Reversal of US Policy Ahead of Midterms – Associated Press
• Trump Sets Up Committee to Investigate, Potentially Remove the Fed's Lisa Cook – Politico
• Some Republicans Want This Watchdog Agency to Sue Trump – Politico
• White House Floats Russ Vought's Deputy to Lead Congress' Watchdog Arm – Washington Sun
• Senate Rules Would Change Under Sweeping Bipartisan Proposal – Semafor
• FBI Is Angling to Hand the UFC a No-Bid Contract to Train Agents – Washington Sun
• Trump Raised Big Bucks for Freedom 250 - But Most Events Appear to be Funded by Taxpayers – Washington Sun
• Top Democrats and Allies Join the Wealthiest to Fight a California Billionaire Tax – Associated Press
• Trump Bought Over $1 Million in SpaceX Debt Days Before Unveiling Space Policy – Washington Post
• Trump Approval Sinks to 30 Percent in New Survey – The Hill
• 78 Percent Blame Trump Policies for Rising Prices: Survey – The Hill
• Hunger Grips a Rural Community Hit by Trump's Cuts – NBC News
• Affluent and Older Americans Got Much Richer in Postpandemic Years – Wall Street Journal

Views and Analysis

• Fed's Warsh Faces Fresh Challenge From Trump – Victoria Guida, Politico
• Tariffs Are Hurting the GOP in Michigan – Wall Street Editorial Board
• Trump's Beef Gamble Isn't Paying Off – Grace Yarrow and Myah Ward, Politico
• Trump Is Trying Last-Minute Ways to Bring Down Prices – Amber Phillips, Washington Post
• Americans' Debt Problems Are Flashing a Warning Not Seen Since the Great Recession – Jeff Cox, CNBC
• Billionaires Might Win This Wealth-Tax Battle but Lose the War – Erika D. Smith, Bloomberg
• Will Wall Street Lose on Election Day? – David Dayen, American Prospect
• A French Debt Solution: Burn It. Freeze It. Anything but Address It – George F. Will, Washington Post
• The Economic Impact of the AI Buildout and Surging US Bond Yields – Nicholas Sargen, The Hill