Courts Block Trump's Bid to Remove Fed Governor Cook Amid New Confirmation and Rate Debate
Courts rejected President Trump's bid to remove Federal Reserve Governor Lisa Cook, reinstating her. Stephen Miran's confirmation fuels debate on Fed independence and upcoming rate decisions.
Overview
- President Trump's attempts to remove Federal Reserve Governor Lisa Cook were repeatedly rejected by an appeals court and a federal judge, who reinstated her to the board.
- The Federal Reserve Act permits presidential removal of governors only 'for cause,' and courts found Cook's due process rights were violated by the administration's actions.
- Senate Republicans confirmed Stephen Miran to an open Fed board spot, with Miran, a White House economic adviser, affirming his commitment to monetary policy independence.
- Economists expressed concern that White House influence could lead the Fed to keep interest rates lower than economic fundamentals justify, meeting Trump's demands.
- Amidst these developments, Chair Jerome Powell signaled the Federal Reserve would likely cut its key interest rate at an upcoming meeting, potentially lowering it to 4.1%.
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Analysis
Center-leaning sources frame this story by emphasizing the unprecedented nature of Trump's attempt to remove Lisa Cook, portraying it as a significant threat to the Federal Reserve's political independence. They highlight concerns from legal scholars and economists about potential erosion of the Fed's autonomy and its negative economic consequences, while also presenting information that undercuts the administration's fraud allegations against Cook.
"The Senate on Monday confirmed economist and Trump adviser Stephen Miran to the Federal Reserve's Board of Governors, giving President Trump more influence over the Fed just one day before central bank officials will meet to decide whether to cut interest rates."
CBS News"The judges added that “Cook’s role at the Federal Reserve differs in relevant ways” from the roles of officials at other agencies."
NBC News"The attempt to fire Cook is seen by many legal scholars as a threat to erode the Fed’s longtime political independence."
Associated Press"The combination of inflationary pressure and labor market weakness presents a situation central banks really don’t like."
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FAQ
The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.9 percent over the 12 months ending August 2025, indicating inflation at that rate according to the Bureau of Labor Statistics.
Hiring has sharply slowed recently, signaling a significant cooling of the labor market which may pose challenges for job seekers.
The main contributors to the inflation increase include rises in shelter costs, food prices (both at home and away from home), and energy prices, particularly a 1.9 percent increase in gasoline costs in August 2025.
President Trump asserts that inflation is accelerating, but this claim is contradicted by official data from the Bureau of Labor Statistics showing a 2.9 percent inflation rate, which does not indicate an accelerating inflation trend.
The differing claims between President Trump and the Bureau of Labor Statistics highlight an ongoing political and economic debate regarding the true state of the economy and the future direction of inflation.
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