Markets Grow Uneasy as Trump Targets Fed Regional Banks
Trump already has two allies on the Fed Board: Michelle Bowman and Christopher Waller, both appointed during his first term.
Quick overview
- President Trump is working to secure a majority on the Federal Reserve Board of Governors amid upcoming turnover at the Federal Open Market Committee.
- The dismissal of Fed Governor Lisa Cook could allow Trump to exert more influence over the Fed's regional banks, pending the outcome of her court challenge.
- Trump currently has two allies on the Fed Board and has nominated Stephen Miran to fill a vacant seat, potentially aligning the Board with his views.
- Even with four loyalists on the Board, Trump would need additional votes from regional Fed bank chiefs to gain a majority on monetary policy decisions.
As he pushes to secure a majority on the Federal Reserve Board of Governors, President Donald Trump is also looking to capitalize on upcoming turnover at the Federal Open Market Committee (FOMC), which sets U.S. interest rates.
The dismissal of Fed Governor Lisa Cook—which Trump announced last week—marks not only the latest escalation in his confrontation with the central bank, but also a potential step toward exerting more influence over the Fed’s 12 regional banks. Cook has already vowed to challenge her removal in court, but if the dismissal is upheld, Trump would gain the chance to secure a majority on the seven-member Board.
Trump’s Allies at the Fed
Trump already has two allies on the Fed Board: Michelle Bowman and Christopher Waller, both appointed during his first term. They were the only governors to dissent at the last policy meeting, voting against holding rates steady—marking the strongest internal disagreement since 1993.
Trump’s latest pick, Stephen Miran, currently head of the White House Council of Economic Advisers, is expected to temporarily fill the seat left vacant by Adriana Kugler’s early resignation. The vacancy gives the White House the opportunity to nominate a full-term replacement in the months ahead.
If Trump ultimately secures four Board members seen as aligned with his views, analysts warn it could deepen market fears about the erosion of the Fed’s independence.
Why the Regional Banks Matter
While the Board of Governors plays a critical role, monetary policy is set by the FOMC, which combines the governors with the New York Fed president and a rotating group of regional Fed bank chiefs, for a total of 12 votes. Even with four loyalists on the Board, Trump would still need at least three additional votes to gain a majority.
However, analysts note he could wield immediate influence in other areas: banking regulation and the approval or veto of regional Fed presidents, who are reviewed every five years. These levers could give Trump greater sway over the central bank even before securing majority control at the policy table.
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