Home Politics Trump Wants To Revamp The Fed. Here’s What That Could Mean For...

Trump Wants To Revamp The Fed. Here’s What That Could Mean For You.

Fed Chair Jerome H. Powell and Federal Reserve governor Lisa Cook before a meeting in June. (Mark Schiefelbein/AP)

President Donald Trump’s fight against the Federal Reserve took a new turn this week, when he announced plans to “immediately” fire Lisa Cook, a central bank governor appointed by President Joe Biden and confirmed by the Senate in 2022.

Cook has said she isn’t stepping down. But economists say the president’s efforts to reshape the Fed — and test his power to fire its leaders — could have far-reaching consequences for not just the U.S. economy, but also everyday Americans, in the form of higher mortgage rates, worsening inflation and economic uncertainty.

For starters, the Federal Reserve isn’t like other government agencies. It is supposed to operate separate from the White House, Congress and broader Washington politics, so officials can set policy with the long-term health of the economy in mind. The Fed chair isn’t part of the president’s Cabinet, and officials aren’t supposed to engage in politics.

Plus, the president doesn’t have the same latitude to fire Fed officials the way he can oust other people in his administration. The president can only fire Fed officials for “cause,” like malfeasance or some other dereliction of duty. When the Supreme Court let Trump fire independent regulators earlier this year, it said its reasoning didn’t apply to the Fed because of the bank’s unique structure and long-standing historical traditions.

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