Trump's effort to fire Fed Governor Lisa Cook was halted shortly before his board nominee, Stephen Miran, won Senate confirmation
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Al Drago/Bloomberg via Getty Images
President Donald Trump failed to oust Lisa Cook as a Federal Reserve governor ahead of a major policy meeting this week, but his nominee to the central bank’s board was narrowly confirmed in a Senate vote just before the Fed is expected to lower interest rates.
In a 2-1 ruling, the U.S. Court of Appeals for the District of Columbia said Cook can remain in her post for now, marking a defeat for the White House’s efforts to wrest more control over the Fed and its economic policy.
It is only a temporary reprieve. The decision allows Cook to keep her job while the courts decide whether Trump can remove her over claims of mortgage fraud. Cook has not been charged with any wrongdoing and recently disclosed documents have undercut Trump's claims against her..
Trump’s order last month to fire Cook marked the first attempt by a president in the Fed’s 112-year history to dismiss a governor. She has since challenged the decision in court, and a federal judge ruled last week that her removal was unlawful, reinstating her to the board.
Judges Bradley Garcia and Michelle Childs ruled late Monday that Trump’s appeal was denied partly because of Cook’s “strong likelihood of success” in arguing that she had not been given due process before she was fired.
The decision came hours before the central bank started a high-stakes, two-day monetary policy meeting on Tuesday. Trump has been pressuring the Fed to cut interest rates all year, so far to no avail.
Trump wrote on Truth Social on Monday that Fed chair Jerome Powell “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND”.
After months of caution amid stubborn inflation, a stalling jobs market, and uncertainty about the impact of Trump's sweeping tariffs, the Fed is forecast to cut interest rates this week. What remains less clear is how big such a rate cut will be. Prediction markets indicate that traders think policymakers will cut rates by 25 basis points.
The president will, however, have an extra voice in his favor. Shortly after the Cook ruling, his nominee to the Fed board , Stephen Miran, was confirmed by a 48-47 vote in the Senate. That means Miran will also take a seat in this week's meeting, which starts Tuesday before an announcement about interest rates on Wednesday.
Miran has previously refused to close the door to staying on indefinitely at the Fed, despite the anticipated length of his term being up in four months.
In theory, Miran could serve past the four-month expiration date of his term if Trump doesn't name a replacement. The move would amount to another crack in the Fed's traditional independence from the White House, and its ability to make decisions on rates without political interference.
The push to unseat Cook relates to claims by Federal Housing Finance Agency Director Bill Pulte, who alleged that Cook had claimed two different properties as her primary residence, one in Atlanta and another in Ann Arbor, Michigan.
However, newly revealed documents show that Cook described the Atlanta condominium as a “vacation home” in a May 2021 loan estimate and as a “2nd home” in a security clearance form later that year, Reuters reports. Experts said would undermine claims of mortgage fraud.
Property records also indicated that Cook never applied for a tax break that would have only been available if the Atlanta property had been listed as her main home.
Pulte has said Cook “made misrepresentations about her mortgages to the Federal Government when she was a Governor,” which Cook has denied.
Cook joined the Fed in 2022 after being nominated by then-President Joe Biden. Her lawyers say any errors were clerical and that the allegations are a pretext for Trump to install loyalists who will do his bidding, undermining the central bank’s historic independence from political interference.
—Joseph Zeballos-Roig contributed to this article.
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