Trump’s Attempt to Fire Lisa Cook From the Fed Is a Naked Power Play
The president’s targeting the Federal Reserve governor over a technicality is blatantly politically motivated.
Lisa Cook is sworn in during a Senate Banking nominations hearing on June 21, 2023, in Washington, DC.
(Drew Angerer / Getty Images)The day after President Donald Trump declared that he intends to unseat Federal Reserve Governor Lisa Cook, the White House unfurled a giant banner emblazoning Trump’s visage across the front of the Labor Department. Below it was the legend “American Workers First!”
This latest foray into dictator branding was clearly meant to burnish Trump’s image in a flailing jobs economy on the verge of the Labor Day holiday weekend. But it also doubled as advertising for Trump’s ongoing putsch against the Fed, an institution he’s roundly castigated for failing to reduce interest rates on his preferred schedule, as the administration’s feckless tariffs program continues to stoke inflation. But a more truthful sentiment for the banner would have been “Sowing Administrative Chaos to Silence My Critics!”
Trump’s action against Cook, like all his other second-term power grabs, rests on a flimsy pretext—the allegation from Bill Pulte, the MAGA lackey now captaining the federal Housing Finance Agency, that Cook obtained mortgages on two properties at lower rates by improperly claiming them as primary residences. Pulte’s charge hasn’t been proven, and Cook is preparing a suit contesting her dismissal. Still, even if the relevant documents point to an abuse here, it’s an exceedingly common one that’s unlikely to rise to the level of the standard for firing a Fed governor, who has to be dismissed “for cause” under federal statute. To take just one example from the house of MAGA, Texas Attorney General Ken Paxton claimed the same homestead exemptions for the mortgages on three homes, per his divorce proceedings; no Trump apparatchik is calling for his head on a pike. And of course Trump himself was found guilty of misrepresenting his own real estate holdings on a massive scale as he tried to secure advantageous loans, which resulted in a $500 million fraud judgment against him (though the financial penalty was overturned on appeal, the fraud charge sticks). No conscience-stricken resignation appears to be forthcoming.
What Trump intends to achieve at the Fed is the same ideological makeover he’s launching at the Bureau of Labor Statistics—another critical arm of independent macroeconomic analysis that provoked his strongman ire for publishing bad job numbers. Trump’s solution there was to fire the Biden-appointed head of the bureau, Erika McAntarfer, and replace her with the woefully unqualified MAGA bootlicker E.J. Antoni, who is awaiting Senate confirmation hearings.
Trump faces a heavier lift in seeking to make the Fed a platform for deceptive economic messaging. In addition to the central bank’s storied independence from outside political pressure, its governing structure isn’t amenable to top-down bureaucratic takeovers. Along with the seven governors charged with setting interest rates and making macroeconomic policy, the Fed’s Open Markets Committee includes five presidents from the Fed’s network of regional banks. Fed governors also serve staggered 14-year terms, which doesn’t make them inviting quarry for a rapid executive branch purge.
But none of this means that Trump, who’s run roughshod over all other legal and governmental restraints to his consolidation of power, will refrain from seizing every opportunity to undermine the Fed. Prior to his bid to dismiss Cook—the first time a president has ever pursued such an action against a Fed governor—Trump exulted over the surprise resignation of Fed Governor Adriana Kugler, and swiftly nominated the head of his Council of Economic Advisers, Stephen Miran, to serve out the balance of her term. The White House wants Miran to remain on the council while also serving at the Fed—a blaring conflict of interest that further erodes the independence of the central bank. And now that Trump is trying to engineer another vacancy on the governing board, White House officials are proffering Miran—who has yet to be confirmed by the Senate—as Cook’s replacement, which would land him on the board until 2038. The term of Fed chair Jerome Powell also expires in May, which presents enormous leverage for Trump to appoint a demonstrated quisling such as Economic Council head Kevin Hassett to be the bank’s own E.J. Antoni.
The Trump White House is also weighing a plan to destabilize the five-member bank-president bloc on the Open Markets Committee, via its strategy of paralyzing federal agencies by depriving them of operating quorums. At key executive branch offices such as the National Labor Relations Board, the Equal Employment Opportunity Commission, and the Federal Elections Commission, Trump has fired incumbent appointees (all Democrats, needless to say) and left them to languish in bureaucratic limbo. The bank members aren’t subject to federal nomination and confirmation protocols, but are rather appointed by a combined group of Fed governors and private bank officials. (This is another reminder that the Fed is a classic captive regulatory agency, serving the interests of its notional constituency rather than the public good, but that is a sermon for another occasion.)
The governors are scheduled to go over the bankers’ terms in February, as part of a five-year review process. Per a Bloomberg report, the administration is considering using this review—traditionally a routine reauthorization—to launch a series of Lisa Cook–style purges. The calculation here is that, should Cook be ousted, the board of governors would have a majority backing the administration’s demands—but the bankers have been consistent inflation hawks, and “no” votes on rate cuts.
This whole dynamic may be shifting in any event, since Powell has recently signaled that he’s receptive to rate cuts after initially toeing a hard line against them. Yet Trump, who’s relentlessly laid into Powell—whom he appointed in 2017—as a “moron,” isn’t likely to take the Fed chair at his word. So be prepared for a giant Trump banner to bedeck the Fed’s renovated headquarters in DC soon—as new chair Hassett regales the great leader with the shit-eating sycophantic praise that’s now standard fare at Trump cabinet meetings. All that’s missing is a robust jobs market and an affordable existence for most working Americans—but who are we to quibble? Let them eat MAGA revenge fantasies.
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