Earlier this month, Bill Dudley penned an Op-Ed confidently declaring that the Fed will “be just fine.”

The context, like the context for everything in 2025, was Donald Trump, and specifically his determination to exert control over US monetary policy. “[Jerome] Powell, not Trump, is in control,” Dudley boldly assessed, as though he were stating the self-evident.

I called Dudley’s column “naive.” And that was me being polite. Even Bill’s choice of words betrayed an uncharacteristic heedlessness.

There was nothing “just fine” about the Fed’s predicament, and by suggesting otherwise, in those terms, Dudley inadvertently conjured history’s most famous meme about incredulous complacency: KC Green’s “On Fire,” which celebrated a decade of ubiquity in January of 2023:

“I remember it first being used on Instagram meme accounts, saying like, ‘When finals week starts,’ … this is fine. ‘When everyone’s yelling at you and you’re supposed to keep a smile on at your work,’ you know, this is fine,” Green told NPR a couple of years back. “It kind of snowballed from there.”

Yes it did, and now we can add another application: “When Donald Trump’s darkening the doorstep of the Eccles building to physically intimidate a Fed Chair and you’re supposed to pretend it’s no different from any other US president’s efforts to cajole the technocrats who set the price of money’… this is fine.”

On Wednesday, Dudley conceded he was wrong. It wasn’t fine four weeks ago, and it damn sure isn’t fine today, with Trump poised to command a 4-3 majority on the Fed Board after ousting Lisa Cook. (Cook vowed to sue. We’ll see how it goes. As discussed here, I don’t think the Supreme Court’s going to defend the Fed if it comes to that, and as I alluded to in Tuesday evening’s daily mailer, the administration may ultimately offer to forgo mortgage fraud charges against Cook if she drops her lawsuit and agrees to step down from the Board.)

A Board majority “wouldn’t immediately allow [Trump] to exert control over the FOMC [but] it would provide the president with more leverage,” Dudley wrote for Bloomberg on Wednesday. “The Board of Governors could, for example, refuse to reappoint some or all of the 12 regional Federal Reserve Bank presidents [as] a way to populate the FOMC with members [who] would do Trump’s bidding.”

That’s not some distant threat. It’s a clear and present danger. The Board will review the current slate of reserve bank presidents in February. Although Dudley suggested Chris Waller and Miki Bowman wouldn’t go along with a scheme to remove Fed presidents who refuse to fall in line, I’m not sure that’s a safe assumption. And if you read between the lines, Dudley’s not so sure anymore either.

In the event the Board demonstrated a willingness to reject regional Fed presidents who don’t pass Trump’s fealty test, the reserve banks would have two choices: “Acquiesce [or] resist,” as Dudley put it. If they resist, he went on, the Board — Trump’s Board — “could conceivably threaten to cut budgets.” That, Bill said, is “truly frightening.” (So… you’re saying it’s not “fine” after all?)

Meanwhile, Trump’s considering other ways to influence the reserve bank network. According to one source who spoke to Bloomberg this week, Scott Bessent’s long list of candidates for Powell’s job actually doubles as a slate of potential Fed bank presidents. “How White House-approved candidates would ultimately secure such positions is unclear,” the linked article dryly noted, adding that “several” regional presidents started to worry about their positions even before Cook’s ouster and began calling “each other about what [her] firing could mean for them” earlier this week.

The Senate Banking Committee’s set to fast track Stephen Miran’s nomination for Adriana Kugler’s vacant Board seat starting next week. Bessent on Wednesday reiterated his call for an internal, and then an external, review of the Fed. In an interview with Fox, Bessent said of Waller and Bowman, “We don’t send them over a note and say, ‘vote this way.'”