Trump team seeks new openings to change Fed leadership
After a Supreme Court ruling kept Lisa Cook at the Fed for now, Trump allies are looking at board removals and the Atlanta Fed vacancy.
By Maya Lindqvist · Senior Technology Correspondent
4 min read
President Donald Trump and his allies are pressing for more influence over the Federal Reserve after the Supreme Court allowed Governor Lisa Cook to remain in her post for now. The effort matters because it could affect who sets U.S. interest-rate policy as inflation concerns complicate the case for cuts.
Bloomberg reported, citing people familiar with the matter, that senior officials and outside Trump allies are examining ways to remove members of the Fed’s Board of Governors and create room for more presidential appointees. Cook remains under scrutiny, as does former Fed Chair Jerome Powell, those people told Bloomberg.
The Supreme Court ruling this week strengthened the Fed’s separation from direct White House control, according to Bloomberg. Some Fed watchers also said the decision was narrow and may not prevent future political challenges to the central bank.
Trump told CNBC on Thursday that the court’s decision turned on procedure rather than the substance of the dispute. “We’ll start the process and we’ll do perfect process and perfect procedure,” he said, referring to Cook.
Cook case could return to court
Trump attempted last August to remove Cook, a Biden appointee, over mortgage-fraud allegations that she denies, Bloomberg reported. Cook sued to block the removal, and the Supreme Court said Monday she could stay while the case continues.
Chief Justice John Roberts wrote that the court was acting on “narrow ground” because Trump had not given Cook proper procedures to challenge the allegations, according to Bloomberg. The court did not decide whether the allegations, if proved, would meet the legal standard for removing a Fed governor.
That leaves open the possibility that any renewed attempt to oust Cook could face another court test, Bloomberg reported.
Powell remains a focus
Trump also remains angry that Powell stayed on the Fed board after his term as chair ended, several people close to the president told Bloomberg. Powell’s underlying term as governor runs until 2028.
Powell has said he would keep a low profile, but he pointed to the administration’s legal pressure on the Fed when explaining his decision to remain, Bloomberg reported. The Justice Department had opened a criminal investigation into his handling of a $2.5 billion renovation of the Fed’s Washington headquarters, which has run over budget.
Powell described that investigation as a result of the Fed refusing to set interest rates according to Trump’s wishes, according to Bloomberg. U.S. Attorney Jeanine Pirro said in April that she was dropping the inquiry, but said she would review a Fed inspector general report expected later this month.
Kevin Hassett, director of the White House’s National Economic Council, criticized Powell’s continued service this week. “I’m concerned with Jay Powell staying,” Hassett said Wednesday on Fox Business, adding that the administration would “keep a close eye” on Fed officials.
Atlanta Fed vacancy draws attention
The administration also sees the open presidency at the Atlanta Fed as a chance to affect the central bank, Bloomberg reported, citing people familiar with the matter. Treasury Secretary Scott Bessent has been contacting his network about possible candidates, those people said.
The Atlanta Fed president will vote on interest rates in 2027. Regional Fed presidents are selected by their local boards, excluding financial-institution members, and must be approved by the Fed’s board in Washington.
Bloomberg reported that the Atlanta search was well advanced in May, but Trump appointees Michelle Bowman and Stephen Miran urged officials to pause until Kevin Warsh was sworn in as Fed chair. The search has since resumed, and Warsh is seeking candidates with private-sector leadership experience, two people told Bloomberg.
White House spokesman Kush Desai did not address the specific claims, Bloomberg reported. Desai said Trump and administration officials have confidence in Warsh and believe Trump’s supply-side policies are cooling inflation and creating conditions for rate cuts.
The Atlanta Fed repeated a June statement from Greg Haile, chair of its board and presidential search committee, saying it was focused on choosing the best candidate for the Sixth District while protecting the process.
This story draws on original reporting from Fortune.