The Trump administration is pursuing alternative avenues to reshape the Federal Reserve’s policy-making team after legal and political obstacles stalled efforts to remove Governor Lisa Cook from the central bank’s board.
Cook, the first Black woman to serve on the Fed’s Board of Governors, remains in her role despite the White House’s push for her dismissal. The administration’s case centers on an alleged misstatement on a mortgage document from years prior, but legal experts note that the U.S. Supreme Court has ruled presidents cannot remove Fed governors without cause and must follow a formal process backed by evidence. The deadline for Cook to respond to the White House’s removal letter passed on Wednesday, leaving the administration without a clear path forward.
The standoff comes as the Fed’s leadership structure limits Trump’s ability to swiftly replace Cook. The Board of Governors is designed to insulate the central bank from political influence, with only two of the seven seats expiring during any single presidential term. Cook’s term runs through 2038, well beyond Trump’s potential second term, which ends in early 2028.
Beyond Cook, Trump faces constraints in reshaping the Fed’s vice chair ranks. Fed Vice Chair Philip Jefferson, whose leadership term expires next year, will soon decide whether to remain on the board. If he leaves, Trump would be limited to selecting a replacement from a narrow pool of current governors: Michelle Bowman, Christopher Waller, or Kevin Warsh, who currently chairs the Fed. Jefferson’s governor’s seat term extends to 2036, further complicating the administration’s timeline.
Regional Federal Reserve banks also present an opportunity for Trump to influence monetary policy indirectly. The Atlanta Fed’s top job has been vacant since February 28, and regional presidents play a role in rate-setting meetings, though their votes rotate. The Fed’s July 28–29 meeting saw three regional presidents dissent in favor of a rate hike, highlighting the diversity of views within the system.
The administration’s broader strategy includes leveraging ongoing investigations into Fed operations. A criminal probe into a renovation project at a central bank building was dropped after a Republican senator threatened to block Warsh’s nomination unless the case was resolved. The probe was deferred to an internal Fed Inspector General investigation initiated by former Chair Jerome Powell, whose term as governor ends in early 2028.
Trump has repeatedly criticized the Fed’s interest rate decisions, calling the board "a political board" and suggesting it may be "a little bit hostile" to his economic agenda. However, the administration’s ability to reshape the Fed’s leadership remains constrained by institutional safeguards and legal precedents, leaving Trump to explore indirect avenues for policy influence.
