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Courts will decide whether President Donald Trump can remove Lisa Cook from the Federal Reserve Board of Governors.
If courts allow President Donald Trump to remove a key Federal Reserve official, his nominees could have the power to set interest rates as Trump wishes.
Trump will have appointed five of the seven Fed governors if he replaces Lisa Cook on the Fed board.
That would not constitute a majority on the 12-member policy committee that sets interest rates, but the governors are empowered to influence who the remaining five voters are.
Trump has repeatedly demanded that the Fed lower interest rates, which could boost the economy. However, experts say this would risk reducing the Fed’s credibility and ability to control inflation.
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.
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.