A federal court blocked Donald Trump’s attempt to fire Lisa Cook, halting his effort to remove a sitting Federal Reserve governor. However, just one day later, his nominee for another Fed seat advanced, giving Trump another shot at reshaping the central bank in his second term.
Miran Nomination Moves Forward
On Wednesday, the Senate Banking Committee approved Trump’s nominee, Stephen Miran, a key economic adviser, to fill an open seat on the Fed’s board. The full Senate is expected to confirm him soon.
Miran could join the central bank’s policy meeting next week, where the Fed is likely to cut interest rates by 0.25 percentage points, bringing the benchmark rate to around 4.1%.
Legal Battle Over Lisa Cook
Trump suffered a legal setback Tuesday night. A federal judge, Jia Cobb, ruled that Trump’s effort to remove Cook was unlawful, citing a lack of cause. The ruling means Cook will likely remain in place and participate in next week’s policy meeting.
In response, the Trump administration appealed the decision on Wednesday, and legal experts suggest the case could eventually reach the Supreme Court.
Trump’s Interest Rate Goals
Economists believe Trump will likely succeed in pushing for lower interest rates over time. However, they say it’s highly unlikely the Fed will cut rates by the three full percentage points he has demanded.
Even if Trump gains control of most seats on the seven-member board, analysts say any drastic rate cuts would still face significant resistance within the institution.
What’s at Stake
These developments mark the ongoing power struggle between Trump and the Federal Reserve. While the central bank traditionally operates independently of the White House, Trump’s actions signal a push for greater political influence over monetary policy.
