Donald Trump eyes four more chances to reshape Fed; seeks Cook’s removal over mortgage document

US President Donald Trump’s efforts to increase his influence over the Federal Reserve have so far faced court challenges and resistance in the Senate. But he could still get as many as four opportunities to appoint or influence key officials at the central bank, potentially giving him greater say over monetary policy.

Trump has backed Fed Chairman Kevin Warsh despite Warsh resisting calls for the interest rate cuts the president has sought. Trump has also criticised the Fed’s Board of Governors, which he says has stood in Warsh’s way.

Also Read: Disquiet grows over AI's dangers: Gates sets tone for pivotal one-on-one with Xi as a race against time begins


“I know he would love to see lower interest rates. But he has got a board, and it's a political board,” Trump said.

The outcome of several personnel decisions and legal battles could determine how much influence Trump gains over the Fed before his term ends.

Lisa Cook case

Fed Governor Lisa Cook remains at the centre of Trump’s efforts to change the composition of the board. Cook, appointed by former President Joe Biden in 2022, has a term that runs until 2038.

Trump previously sought to remove Cook, but the US Supreme Court ruled that a Fed governor cannot be removed without adequate cause and that the president must follow a clear process and provide evidence supporting the decision.

The case was sent back to a federal district court, while Cook remained in office.

Also Read: Who’s in command? US Army’s top brass is thinning out as Hegseth fires generals amid Iran war

The Trump administration is continuing its effort to remove her, arguing that an inaccurate statement on a mortgage document from years ago provides sufficient cause. The White House has asked Cook to respond to its case by Wednesday.

Cook has described the effort as an attempt to gain influence over interest rate policy. She is expected to challenge any move to remove her, potentially leading to another lengthy court battle.

Jerome Powell to remain until 2028

Former Fed Chairman Jerome Powell, who led the central bank for more than eight years until May, has remained a governor. His current term runs until early 2028.

That makes the end of Powell’s term the only certain Fed board vacancy Trump can fill during the rest of his presidency.

Trump had previously considered removing Powell and the administration also launched a criminal investigation linked to cost overruns in a Fed building renovation project.

The investigation was later dropped after Republican Senator Rand Paul threatened to block Warsh’s nomination as Fed chief until the matter was resolved. US Attorney for the District of Columbia Jeanine Pirro said the decision to drop the probe deferred to a separate investigation by the Fed’s inspector general.

The findings of that investigation could potentially lead to another attempt to remove Powell, although its timeline remains unclear.

Jefferson’s decision could open another seat

Fed Vice Chair Philip Jefferson could also affect Trump’s ability to reshape the board.

Jefferson’s leadership term expires next year, but his term as a governor continues until 2036. He will have to decide whether to leave the Fed or remain on its board.

Fed vice chairs have typically left the central bank when their leadership terms ended, although some have departed earlier.

If Jefferson stays, Trump would have fewer opportunities to appoint a new governor. He would also need to select a new vice chair from the existing pool of governors.

Apart from Warsh, Trump could choose between Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, both of whom were appointed by him. Waller has been viewed as a more independent, data-driven policymaker.

Atlanta Fed post remains vacant

Trump’s potential influence also extends beyond the Fed’s seven-member Board of Governors.

The central bank has 12 regional reserve bank presidents. Five vote on interest rates on a rotating basis, while all take part in policy discussions at the Fed’s eight scheduled rate-setting meetings each year.

Regional Fed presidents are selected by their local boards and require approval from the Board of Governors.

The Atlanta Fed presidency has been vacant since February 28. The selection process was delayed after the Fed came close to choosing a finalist, allowing Warsh time to take charge and review the candidate.

Regional bank positions have not traditionally been viewed as a route for White House influence. Three regional Fed presidents, however, voted for a rate increase at the Fed’s July 28-29 meeting, Warsh’s second meeting as chair.

Trump’s attempts to reshape the Fed therefore remain tied to a mix of court rulings, possible retirements and appointments. The decisions could determine whether he gains more influence over the central bank’s policy committee before his presidency ends.


(With inputs from Reuters)