Trump's Historic Attempt to Remove Fed Governor Lisa Cook
President Donald Trump made significant appointments to the Federal Reserve's Board of Governors during his presidency, including Jerome Powell as Chairman. Recently, he attempted to remove Fed Governor Lisa Cook for cause, marking a historic first for the central bank.
Trump appointed Powell, Richard Clarida, Michelle Bowman, and Christopher Waller to the Fed's Board of Governors. Powell's term as Chairman expires in May 2026, while Cook's term extends until 2038. If Trump's removal effort succeeds, he could nominate a replacement for the long term.
The Fed's Board of Governors, led by Powell, is responsible for setting interest rate policy. The FOMC, which includes the seven governors and other members, adjusts the federal funds rate as needed. Four of the seven governors were appointed by Republicans, including Powell, Bowman, Waller, and Miran. Kenny Polcari, SlateStone Wealth chief market strategist, discussed the Fed's ability to live with 3% inflation on 'Varney & Co.'
Trump's attempt to remove Cook is unprecedented in the Fed's 112-year history. Cook has denied wrongdoing and filed suit to block her firing. The Supreme Court will hear arguments in January.
The attempted removal of Lisa Cook from the Fed's Board of Governors by President Trump highlights a significant shift in the relationship between the White House and the central bank. The outcome of this case will have long-term implications for the Fed's independence and the political landscape surrounding it.
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