Firing of Fed Official Could Give Trump Control Of Interest Rates For Years

If President Donald Trump is successful in removing Federal Reserve Governor Lisa Cook, his appointees could control the central bank for years to come. 

Trump escalated his efforts to exert control over the nation’s central bank this week when he said he was firing Cook, a member of the committee that sets the Fed’s key interest rate, amid allegations of mortgage fraud. Cook sued to keep her position Thursday, claiming her dismissal was “unprecedented and illegal.”

Should Trump prevail in the legal case, his nominees would have the power to deliver Trump the rate cuts he has demanded. Some experts have warned that the move could diminish the Fed’s reputation for making decisions based on economics rather than politics, as well as hurt its ability to control inflation.

Trump said he would soon control the board and implied that mortgage rates, which are influenced by the federal funds rate, would soon fall.

“We’ll have a majority very shortly,” Trump said Tuesday at a cabinet meeting. “So that’ll be great. Once we have a majority, housing is going to swing, and it’s going to be great. People are paying too high an interest rate.”

The Fed has held its key rate steady throughout 2025, which has led Trump to repeatedly lambaste Fed Chair Jerome Powell, whose term as chair expires next May. The Fed has been reluctant to cut rates until it’s clear that tariffs aren’t spurring inflation, though Powell signaled last week that economic conditions could warrant a policy change when the policy committee meets next month.

How Trump Could Take Over The Fed

The Fed is set up to resist the president’s influence but is not completely immune, especially in the face of the kind of attacks that Trump has launched.

“While some safeguards are there, the challenges to Fed independence have been unprecedented,” said Victor Li, an emeritus professor of economics at Villanova and expert on the Fed.

The central bank is controlled by a board of seven governors, whom presidents appoint to serve 14-year terms. Trump appointed three of the board’s seven members, Christopher Waller, Michelle Bowman, and Powell during his first term in office. (Once his term as Fed chair ends, Powell could stay on as a governor through January 2028, though he hasn’t said whether he would do so.)

Additionally, Trump has appointed his economic advisor, Stephen Miran, to replace Adriana Kugler, who resigned from the board this month. Should Trump successfully replace Cook, Philip N. Jefferson and Michael S. Barr would be the only remaining governors not appointed by Trump. In other words, his nominees would dominate the board by 5-2.

That alone wouldn’t be enough to give Trump appointees control of the crucial Federal Open Market Committee, which votes to set the central bank’s influential fed funds rate. That group’s 12 members consist of the seven Fed governors plus five presidents of the regional Federal Reserve banks. Out of those five, one is always the New York Fed, with the other 11 regional bank presidents occupying the four remaining seats on a rotating basis.

However, the governors have the power to approve those bank presidents every five years, with the next opportunity coming in February 2026 when all the regional bank presidents’ terms expire.

“In theory, this could be a way to populate the FOMC with members that would do Trump’s bidding, empowering the president to get the big rate cuts he seeks,” Bill Dudley, a former president of the Federal Reserve Bank of New York, wrote in a column for Bloomberg Wednesday.

An open question is whether Trump’s nominees would rubber-stamp his agenda to lower interest rates.

Trump appointees Bowman and Waller have called for lower rates and voted to lower them at the FOMC’s most recent meeting in July, going against the other 10 voters. However, the two officials said their votes were based on economic considerations.