Trump Allies Ramp Up Efforts to Reshape the Federal Reserve

After the U.S. Supreme Court blocked the Trump administration’s attempt to dismiss Federal Reserve Governor Lisa Cook earlier this week, President Donald Trump and his allies have renewed and intensified their push to reshape the Federal Reserve’s personnel and institutional structure.

Multiple people familiar with the matter revealed that senior White House officials and external presidential allies are exploring various viable avenues to replace sitting members of the Federal Reserve Board of Governors, clearing the way for Trump to appoint more candidates aligned with his policy philosophy. While the Supreme Court’s ruling allows Lisa Cook to remain in her post temporarily, insiders note that Cook and former Fed Chair Jerome Powell remain key targets for removal by the White House.

Though the Supreme Court’s decision further cemented the Federal Reserve’s legal status as an institution independent of the U.S. executive branch, many Fed observers point out that the ruling is narrow in scope and cannot fully shield the central bank from future political interference and pressure. Undeterred by the court’s decision, the Trump camp has identified procedural loopholes in the ruling that outline a compliant path to force Cook’s resignation and is now doubling down on related efforts.

In an interview with CNBC on Thursday, Trump stated bluntly that the Supreme Court’s ruling was based solely on procedural grounds rather than substantive merits of the case. He emphasized that the U.S. administration will restart formal procedures to remove Cook from her position as Fed Governor.

“We’re going to go through the process, and we’re going to do it perfectly,” Trump said.

Beyond targeting current Fed board members, the Trump administration views the vacant presidency of the Federal Reserve Bank of Atlanta as a critical opportunity to intervene in central bank decision-making and expand policy influence. Sources say U.S. Treasury Secretary Scott Bessent is leveraging his professional network to screen potential candidates extensively. Given the Atlanta Fed’s highly influential market analysis of core economic indicators including U.S. growth, Trump’s economic team regards the position as vital to steering monetary policy direction. Notably, the Atlanta Fed president will gain voting rights on Fed interest rate decisions in 2027.

Since returning to the White House last year, Trump has ramped up oversight and pressure on the Federal Reserve, repeatedly criticizing former Chair Jerome Powell for cutting interest rates too slowly. He has publicly considered removing Powell and made it clear he would appoint a successor more aligned with his economic agenda. Current Fed Chair Kevin Walsh, Trump’s ultimate pick for the role, also publicly advocated for lower interest rates prior to his nomination, aligning closely with Trump’s policy demands.

However, renewed inflationary pressures have diminished market expectations for Fed rate cuts this year. According to economic projections released in June, nearly half of Fed officials believe the central bank will likely need to resume rate hikes within the year. Several regional Fed presidents remain the most vigilant policymakers regarding persistent inflation risks.

White House spokesperson Kush Desai declined to comment specifically on the administration’s Fed personnel overhaul and political pressure campaign. Desai stated: “President Trump and administration officials have maintained a consistent view: they have full confidence in Fed Chair Kevin Walsh. Despite short-term volatility in energy markets, the administration’s supply-side policies are curbing inflation and paving the way for interest rate cuts.” The U.S. Treasury Department did not respond to requests for comment.

White House Remains Discontented With Powell’s Board Tenure

Multiple sources close to Trump indicate the president remains frustrated that Jerome Powell has stayed on the Federal Reserve Board of Governors after stepping down as Fed Chair. Tensions flared further in late May, when Powell received the John F. Kennedy Courage Award in recognition of his outstanding leadership of the Fed. The award ceremony praised U.S. congressional institutional design for insulating monetary policy decisions from political pressure.

Kevin Hassett, Director of the White House National Economic Council, has escalated his public criticism of Powell recently, voicing growing concerns over his continued board membership. “I’m worried that Jay Powell is still there,” Hassett said Wednesday on Fox Business. “Most votes at the Fed are not patriotic votes. They’re votes to undermine Trump’s agenda — and we have to watch that very carefully.”

Under Federal Reserve conventions, former chairs typically depart the central bank upon the expiration of their chair terms. However, Powell has chosen to remain a Fed Governor, with his board term set to expire in 2028. Powell has pledged to keep a low profile in his remaining tenure but has publicly acknowledged sustained legal pressure from the White House aimed at disrupting the Fed’s operational independence.

Powell’s decision to stay on the board comes amid a U.S. Department of Justice criminal investigation into his oversight of the Fed’s $2.5 billion Washington headquarters renovation project, which suffered severe cost overruns. Powell has asserted the probe was politically motivated, stemming from the Fed’s refusal to adjust interest rates per Trump’s demands. The Fed Inspector General’s report on the renovation is scheduled for release later this month.

Though U.S. District Attorney for the District of Columbia Jane Pirro paused the investigation in April, she confirmed she would fully review the upcoming inspector general’s findings, leaving open the possibility of resuming the probe. Insiders state Trump administration officials and their allies are closely monitoring the report and other opportunities to push for Powell’s removal from the Fed Board.

The push to reshape Fed personnel dates back to August last year, when Trump launched an unprecedented effort to terminate Governor Lisa Cook over alleged mortgage fraud — accusations Cook has consistently denied. Cook filed a lawsuit to block her dismissal, with the case ultimately escalating to the Supreme Court.

In a ruling issued Monday, a majority of Supreme Court justices ordered that Cook may remain in her post pending the final outcome of the litigation. Chief Justice John Roberts explained in the court’s opinion that the narrow ruling stemmed from the Trump administration’s failure to provide Cook with proper procedural channels to defend herself against the allegations.

Shortly after the ruling, Trump and his allies confirmed they would continue their efforts to remove Cook from the Fed. Critically, the Supreme Court did not rule on whether the underlying allegations against Cook constitute legitimate legal grounds for dismissal, meaning any future termination attempt by Trump will remain subject to judicial review.

White House Expands Influence Over Regional Fed Banks

While targeting the core Federal Reserve Board of Governors, the Trump administration has turned its attention to the nation’s 12 regional Federal Reserve Banks, prioritizing the vacant presidency of the Atlanta Fed as a key opening to install ideologically aligned officials and deepen its influence over monetary policy.

Treasury Secretary Bessent and other senior administration economic officials are overseeing and closely tracking the selection process for the new Atlanta Fed president.

Per Federal Reserve rules, regional Fed presidents are elected by their local bank boards, which consist of regional business executives and community leaders (excluding financial institution representatives), with final appointments subject to approval by the Federal Reserve Board in Washington. Regional Fed presidents serve rotating voting seats on the Federal Open Market Committee, directly shaping U.S. interest rate policy.

The Atlanta Fed’s presidential search was nearly finalized in May, but two Trump-appointed Fed officials — Fed Vice Chair for Supervision Michelle Bowman and then-Governor Stephen Myhre — recommended pausing the process until Kevin Walsh was sworn in as Fed Chair, reserving input on the key hiring decision for the new leadership.

The selection process has since resumed. According to two people familiar with the matter, Fed Chair Walsh is prioritizing candidates with extensive private-sector leadership experience.

The Atlanta Fed presidency became vacant following the resignation of former President Raphael Bostic, a longstanding vocal advocate highlighting persistent inflation risks. Bostic announced his departure in November last year and officially stepped down in February 2025.

When contacted for comment, the Atlanta Federal Reserve Bank reaffirmed its official statement from June. “We remain focused on identifying the best candidate to serve the Sixth Federal Reserve District while upholding a fair and rigorous selection process,” said Greg Hill, Chair of the Atlanta Fed Board of Directors and Chair of the Presidential Search Committee. “We will provide updates on this critical leadership position in due course.”

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