The Trump White House issued a formal letter to Federal Reserve Governor Lisa Cook dated August 6, notifying her of potential removal and citing mortgage fraud allegations, giving her 21 days to respond. The Supreme Court earlier blocked Trump's first removal attempt on due-process grounds; this letter is structured to satisfy those procedural requirements. The action remains constitutionally unprecedented for a sitting Fed governor and has no confirmed legal pathway to succeed.
For Armada's traditional repo desk, the primary risk is market uncertainty about Fed governance and independence, which can widen bid-ask spreads on Treasuries and increase SOFR volatility. Counterparties including hedge funds and money market funds may reprice short-duration risk if Fed credibility concerns intensify. This is a monitoring item but warrants a standing flag on the risk dashboard given the September 15 Clarity Act vote occurring in the same political window.