Top officials and outside allies of President Donald Trump are actively exploring ways to remove members of the U.S. Federal Reserve's Board of Governors in Washington, aiming to clear the path for more of the president's own picks, according to people familiar with the matter. This renewed push comes after the Supreme Court blocked an effort to fire Governor Lisa Cook earlier this week.
Supreme Court ruling spurs new tactics
Although the Supreme Court's ruling reinforced the Fed's independence from the executive branch, some Fed watchers noted the narrowness of the decision and cautioned it does not completely shield the central bank from future political attacks. Undeterred, Trump allies see the decision as providing a procedural roadmap for how to successfully push Cook out, and are redoubling their efforts to do so, according to sources who spoke on condition of anonymity.
Cook remains a target after the high court allowed her to stay in her job for now, as does former Chair Jerome Powell, the people said. Trump told CNBC on Thursday that the court's ruling was based on procedure, not merit, and his administration would begin a process to remove her from the central bank. "We'll start the process and we'll do perfect process and perfect procedure," he said.
Atlanta Fed vacancy seen as opportunity
The administration also sees a vacancy atop the Atlanta Fed as another opportunity to exert influence over the central bank, with Treasury Secretary Scott Bessent tapping his network for potential candidates, the people said. The Atlanta Fed presidency is seen as a key role by Trump's economic policy team because of the closely watched analysis it conducts on economic growth and other topics. The Atlanta Fed president will also vote on interest rates in 2027.
Trump ratcheted up scrutiny of the Fed after returning to office last year, frequently berating Powell for not lowering interest rates quickly enough. Trump publicly mused about firing the former chair and made clear that he would choose a successor more aligned with his economic thinking. His eventual pick, now Fed Chairman Kevin Warsh, appeared to echo Trump's view that interest rates should be lower in the run-up to his nomination.
Inflation outlook complicates rate cut hopes
But Fed rate cuts are looking less likely this year amid renewed inflationary pressures. About half of officials now think the Fed may need to hike rates this year, according to projections released in June. Several of the presidents of the Fed's regional banks are among policymakers most anxious about the inflation outlook.
White House spokesman Kush Desai did not comment directly on points raised in this story. "President Trump and Administration officials have all consistently said the same thing: everyone has confidence in Chairman Kevin Warsh and, despite temporary disruptions to energy markets, the Trump administration's supply-side policies are cooling inflation to pave the way for interest rate cuts," Desai said. The Treasury Department did not reply to a request for comment.
