Trump team presses ahead with Federal Reserve overhaul

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Trump allies increase pressure on Fed

Highlights

Trump allies are pursuing new ways to reshape the Federal Reserve.
Lisa Cook remains on the Fed board while her legal case continues.
Jerome Powell’s decision to stay as governor has drawn White House criticism.
The Atlanta Fed vacancy gives the administration another point of interest.

In the days after the ruling, Trump’s team began looking at new procedural paths to remove Cook and increase White House influence over the Fed’s Board of Governors, Bloomberg reported. The Supreme Court allowed Cook to remain in office while the case continues, but the decision left open questions about whether a future removal effort could survive if the administration followed a more formal process.

Pressure after the court ruling

Cook remains a central target after Trump tried to remove her last year over mortgage-fraud allegations that she denies. The Supreme Court decision gave her temporary protection, but it did not fully settle the legal standard for removing a Fed governor. That narrow outcome has encouraged Trump allies to pursue a revised strategy rather than abandon the effort.

The confrontation has become one of the most direct challenges to Fed independence in decades. Fed governors are protected by long terms and removal rules meant to prevent presidents from forcing monetary policy changes for political reasons. The court’s ruling reinforced that principle, while also leaving room for further litigation over procedure and cause.

Jerome Powell is also under scrutiny. Although his term as Fed chair has ended, he remains on the Board of Governors until 2028. His decision to stay followed mounting legal and political pressure, including scrutiny of the Fed’s $2.5 billion headquarters renovation project.

Atlanta Fed becomes another opening

The administration is also watching the vacancy at the Federal Reserve Bank of Atlanta. The regional bank matters because its president will vote on interest rates in 2027 and because the Atlanta Fed produces closely followed analysis on economic growth.

Regional Fed presidents are selected by their local boards and approved by the Fed board in Washington. That process gives the White House no direct appointment power, but allies of the administration see the vacancy as another route to influence the central bank’s policy debate.

The timing is important. Inflation pressures have made rate cuts less certain, and about half of Fed officials now see a possible need for rate increases this year, based on the June projections cited in the source material. That puts the Fed’s cautious stance at odds with Trump’s preference for lower borrowing costs.

A fight over monetary independence

The stakes go beyond individual Fed officials. If the White House can remove governors or shape regional Fed leadership more directly, investors may question whether interest-rate decisions are being made to control inflation or to serve political goals.

That matters for markets because Fed credibility helps anchor expectations for inflation, the dollar, and U.S. Treasury debt. The Cook case, Powell’s remaining term through 2028, and the Atlanta Fed opening all point to the same issue: the boundary between elected power and central-bank independence is being tested at a sensitive moment for the economy.

As we previously reported, Powell warns Trump's pressure on the Fed could threaten markets.

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