Donald Trump has failed in a last-ditch effort to remove Lisa Cook from the Federal Reserve before its decision on interest rates this week, even as his nominee to the US central bank’s board Stephen Miran was confirmed in a knife-edge Senate vote.
Hours before the Fed is due to start a high-stakes meeting on whether to cut borrowing costs for the first time this year, a US appeals court rejected Trump’s eleventh-hour bid to oust Cook as a governor.
In a 2-1 ruling, the US Court of Appeals for the District of Columbia allowed her to remain in post while the courts decide whether Trump can remove her over allegations of mortgage fraud.
The ruling is a blow to Trump, whose administration has piled pressure on the central bank to lower interest rates.
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But within minutes of the court’s ruling the Senate confirmed Trump’s choice of Miran, the chair of the US president’s Council of Economic Advisers, to become a Fed governor in a 48-47 vote. It gives Miran the opportunity to participate in this week’s meeting.
Members of the Federal Open Market Committee are expected to back a quarter-point cut in borrowing costs from their current levels of between 4.25 per cent and 4.5 per cent.
Some voters, including Fed governor Christopher Waller and Miran, could support a cut of half a point or more.
The president said in a post on Truth Social earlier on Monday that “Too Late”, a moniker the US president uses to refer to Fed chair Jay Powell, “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND”.
Trump has called for rates to fall to as low as 1 per cent – a level usually associated with economies in crisis – to boost growth and lower the government’s borrowing costs.
The president launched his attempt to remove Cook last month over claims of mortgage fraud. She has denied the accusations and this month won the right to return to the Fed while her case continues.
The White House had appealed against the decision, asking judges to halt the lower court’s decision by Monday to bar her from participating in this week’s FOMC meeting.
The court’s majority said on Monday that it had denied Trump’s appeal, in part, due to “Cook’s strong likelihood of success” in her argument that she had not been given adequate due process before the president fired her.
The White House did not immediately respond to a request for comment on the ruling by the Appeals Court.
Trump fired Cook based on mortgage documents publicised by Bill Pulte, director of the Federal Housing Finance Agency director and a Trump ally, which appear to show that Cook purchased a Michigan house and Atlanta condominium within weeks of one another and claimed both were principal residences.
Principal residences benefit from lower interest rates and more favourable tax treatment.
The justice department is investigating Pulte’s claims, and Cook has not been charged. A loan estimate seen by the Financial Times shows she declared that the Atlanta condominium was a vacation home on that particular document.
Michelle Childs and Bradley Garcia, appellate judges who were appointed by ex-president Joe Biden, agreed with the lower court that Cook’s dismissal would violate due process.
Protections for Fed governors were meant to ensure “a measure of policy independence from the president”, they wrote in the order.
Judge Gregory Katsas, a Trump appointee, wrote in dissent, arguing that the district judge’s findings were “mistaken, and the equitable balance here tips in favour of the government”.
Miran, meanwhile, takes the seat vacated by Adriana Kugler, who abruptly departed the central bank in August, less than six months before her term was due to expire.
Miran said at his confirmation hearing that he intends to remain at the helm of the Council of Economic Advisers, taking a leave of absence during his time at the Fed.
This move would contradict a piece of research he co-authored for the Manhattan Institute think-tank, which called for measures to stop the “revolving door” between the central bank and the White House.
The president has said Miran would only be expected to take on the role until around the start of next year, when Kugler’s term was set to expire.
While senators largely voted along party lines, one Republican – Lisa Murkowski – voted against Miran’s confirmation amid concerns about his decision to keep his White House role.
Senate minority leader Chuck Schumer opposed Miran’s confirmation.
“Mr Miran’s nomination is bad news for every American who is suffering from Donald Trump’s disastrous economic agenda,” Schumer said. “Mr Miran will be nothing more than Donald Trump’s mouthpiece at the Fed.”
Tim Scott, Republican for South Carolina and chair of the Senate Banking Committee, said he was “confident” Miran would “act in an independent manner”. – Copyright The Financial Times Limited 2025
