Traders hold steady on Cook

On Thursday, the Trump Administration asked the U.S. Court of Appeals for the District of Columbia to allow the firing of Fed Governor Lisa Cook before next week’s policy meeting. The move came just two days after a lower court blocked her removal while her lawsuit proceeds, according to The New York Times.

However, as of now, Kalshi traders are largely unmoved by President Trump’s latest attempt to reshape the Federal Reserve’s leadership.

The Kalshi market on whether Cook will be removed from the Fed this year has shown little reaction. Contracts are holding at 26 percent, nearly unchanged in recent days. That is a significant increase compared with mid-August, when the odds traded closer to 12 percent, but the contract has settled into a narrow mid-20s range through September. Traders appear to be signaling that the legal fight is important but not enough to warrant repricing in the short term.

A related Kalshi market on whether Cook will face federal criminal charges has dropped to 23 percent, nearly ten points lower than a week earlier.

Trump has justified Cook’s dismissal on allegations of mortgage fraud, but she has not been charged or convicted of a crime. Her lawyer has denied the claims outright, Politico reports. Traders seem to doubt that criminal proceedings will emerge, even as the allegations remain central to the administration’s argument for dismissal.

The broader markets tied to Chair Jerome Powell continue to show calm. The Kalshi contract on Powell leaving before 2026 is priced at just 8 percent, near its lowest level of the year. At the start of 2024, that figure was more than 20 percent, reflecting greater uncertainty. The contract has trended lower throughout 2025, underscoring market confidence that Powell’s position is secure.

Meanwhile, the shorter-term contract on whether Trump will try to fire Powell in 2025 is holding at 16 percent, with only a modest uptick in recent days.

Traders appear to be drawing a distinction between Cook’s contested seat and Powell’s chairmanship. Cook’s market reflects immediate vulnerability tied to the courts, while Powell’s odds remain anchored by the view that Trump is unlikely to risk the financial shock of attempting to remove him directly. As CNBC noted, Trump has often attacked Powell over interest rates but has stopped short of trying to fire him.

The timing of the legal battle is especially important because of next week’s Federal Open Market Committee meeting. The Fed is widely expected to resume cutting interest rates, though likely at a slower pace than Trump prefers.

Cook’s vote has taken on symbolic weight, which is why the administration asked the appeals court for a decision before the meeting begins on Tuesday. The Fed, which is a named defendant in Cook’s lawsuit, has said it will abide by whatever the courts decide, according to The New York Times.

Analysts warn that the real stress test for markets will come only if the Fed starts to show signs of political interference. Vincent Reinhart, chief economist of investments at BNY, recently told Politico that fears about the loss of central bank independence could amplify market stress if inflation rises. Traders would have less faith in the Fed’s willingness to raise rates in a politically difficult environment.

For now, Kalshi contracts suggest that investors see the Cook case as a political fight but not as a signal of imminent changes in monetary policy.

Kalshi markets now forecast:

The odds seem to show that while Trump’s legal maneuvers are being closely watched, traders do not yet see a collapse of Fed independence. Cook’s future is in play, but Powell’s leadership remains insulated, and for now the markets are signaling patience rather than panic.

Sources: Politico, Sept. 11, 2025; New York Times, Sept. 11, 2025; CNBC, Sept. 11, 2025.

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