WASHINGTON (AP) — President Donald Trump’s goal of appointing a majority of the Federal Reserve’s board of governors faced a setback late Tuesday when a court…
President Donald Trump’s goal of appointing a majority of the Federal Reserve’s board of governors faced a setback late Tuesday when a court blocked his unprecedented attempt to fire Lisa Cook.
But the very next next day, his nominee to replace another Fed governor moved forward, giving him one more opportunity during his second term to reshape the Fed.
Over time, Trump will almost certainly get the lower short-term interest rate he is seeking, economists say, although it’s unlikely the Fed will shave 3 percentage points from its current level of about 4.3%, as he has demanded, even if he gets most of the seats on the seven-member board.
On Wednesday, Trump got one step closer to reaching a majority when the Senate Banking Committee approved the president’s nomination of Stephen Miran, one of his top economic advisers, to an open position on the Fed’s board. The full Senate is expected to approve Miran shortly. He could end up participating in the central bank’s policy meeting next week, when it is expected to reduce its key interest rate by a quarter-point to about 4.1%.
But he took a step back with Cook after a federal court blocked Trump’s attempt to fire her late Tuesday. Jia Cobb, a judge appointed by former president Joe Biden, ruled that the firing was illegal because the administration did not provide sufficient cause to remove her. That means Cook is also likely to participate in next week’s Fed meeting.
The Trump administration appealed that ruling Wednesday, and many observers expect the case could end up at the Supreme Court.
Here are where things stand regarding Trump, the Federal Reserve, and its traditional independence.
Fed governors aren’t like Cabinet members or other officials who serve at the pleasure of the president.
