Aiming Directly for Majority Seats: Trump Administration’s Battle with Fed "Significantly Escalates"

A Federal Reserve spokesperson stated that according to the Federal Reserve Act passed by Congress, governors serve long fixed terms, and the president can only remove them for "cause." The long terms and removal protections for governors are important safeguards to ensure monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people. The Federal Reserve will continue to fulfill its legally mandated responsibilities.

The statement noted that Cook, through her lawyer, has indicated she will seek judicial resolution. The Federal Reserve will, as always, comply with any court ruling.

At a cabinet meeting on the 26th, Trump stated that the Federal Reserve needs "100% honest people." Regarding Cook’s intention to sue, Trump said he is prepared for a legal battle and would abide by the court’s decision.

Trump also mentioned that he has a suitable candidate in mind to replace Cook. According to a Wall Street Journal report on the 26th, Trump has told advisors he wants to announce a candidate to replace Cook on the Federal Reserve Board as soon as possible. The report stated that Trump is considering Stephen Miran and David Malpass to replace Cook as Federal Reserve governors.

The Federal Reserve Board is the core decision-making body of the Fed, with seven seats, all nominated by the U.S. president and confirmed by the Senate. Currently, aside from Fed Chair Powell, only two of the remaining six members were nominated and appointed by Trump during his first term. The other four were all nominated and appointed by former President Biden.

Recently, Trump has repeatedly expressed dissatisfaction with the Federal Reserve’s refusal to lower benchmark interest rates as he desired. The Washington Post reported that Trump’s targeting of Cook appears aimed at creating more vacancies on the seven-member Federal Reserve Board, accelerating the process of Trump-aligned governors gaining majority seats.

On the 26th, Trump also stated that he would soon secure a majority at the Federal Reserve and that interest rates must come down to address housing costs.