The Federal Reserve is experiencing a rare crisis of confidence not seen in 112 years.

On one side is public pressure from the White House. The President has made it clear that the next Fed chair nominee will be announced in early 2026, and, in an unprecedented move, has fired Governor Cook—an action that directly challenges the Fed’s independence. Those “You’re fired” cartoons circulating on social media are no joke; the tension is palpable. In December, word came out that Hassett is the frontrunner. If the Supreme Court actually rules that the President can dismiss governors at will, the Fed’s last line of defense will truly be gone.

On the other side, “Big Short” Michael Burry launched a direct attack: “America doesn’t need the Federal Reserve at all!” He’s not just talking. While shorting tech stocks, he’s also harshly criticizing rate cuts, accusing the institution of a century of inaction and claiming its policies simply cater to the White House at the expense of ordinary savers. The mix of his stance and interests makes his words all the more damaging.

The Fed is truly caught in a bind. High interest rates have curbed inflation, but what about the $38 trillion in debt? Cutting rates could ease fiscal pressure, but what if inflation bounces back? Back in October, they quietly paused quantitative tightening and cut rates by 25 basis points, leading many to speculate whether this was a concession to the White House.

Supporters call it the “lender of last resort,” saying the financial system can’t function without it. Critics think it’s long overdue for a complete overhaul. Right now, the market is closely watching December’s FOMC meeting and the Supreme Court’s decision. Whether the Fed’s independence can survive depends on this pivotal moment.

Reform or subordination? This battle over power and money is likely just getting started.