Abigail McDaniel

October 18, 2025

On August 25, 2025, President Trump took to Truth Social, a conservative social media platform similar to Elon Musk’s X, to announce the firing of Federal Reserve Governor Lisa Cook. Cook, a Democrat, was appointed to the Federal Reserve Board in 2022 by Joe Biden. Trump removed Cook on grounds that there was “sufficient reason to believe [she] may have made false statements on one or more mortgage agreements” [1]. Allegedly, Cook claimed two different properties as her primary residence, a tactic used to lower mortgage payments [2]. Trump’s sudden termination of Cook poses an overextension of presidential power and political bias.

Cook works at the Federal Reserve, an agency of the federal government that controls interest rates to limit unemployment and promote stable prices for Americans. The Reserve is led by a board of seven governors, who convene to vote on whether interest rates should be raised or lowered. Historically, the Federal Reserve has been an independent agency, meaning it operates outside of the direct political influence of the President and Congress [3].

To become a part of the board, governors are appointed by the President and then confirmed with a majority vote by the Senate. Once elected to office, governors hold their terms for fourteen years [3]. This structure of appointment creates a system of checks and balances within the Reserve, as governors need approval from both the executive and legislative branches of government before they begin their duties. Once governors start their work, it is imperative that they operate independently from the political sphere, as to not be influenced by any particular political agenda. 

Presidents are incentivized to pressure the Reserve for lower interest rates because decreased interest rates make big purchases, like houses or cars, more affordable. However, there is an inverse relationship between interest rates and the inflation rate, meaning that decreasing interest rates leads to increased inflation [4]. The Federal Reserve must act independently of the President to set the interest rates at what is best for the longevity of the American economy, not at what is best for the sitting president. This is precisely why governors of the Federal Reserve hold their office for fourteen years, so as to extend their terms across multiple presidencies and not allow any one president excessive influence in appointing members to the Board of Governors of the Federal Reserve. Allowing a president to fire governors from the Board simply because he chooses to do so fundamentally undermines the structure of the Federal Reserve because the President could simply fire those who disagree with his financial policy and stack the board with loyalists. 

In order to maintain the Reserve’s independence, governors cannot be fired from their position unless a president removes a governor “for cause” [3]. The exact definition of “for cause” is ambiguous, however, the phrase is generally understood to mean a neglect or abuse of duty [2].  

         Cook’s termination is a violation of the “for cause” section of the Federal Reserve Act. Cook’s mortgage issues have no relation to her ability to do her job, and she has yet to be tried or even convicted for the allegations. Trump had no legal basis to fire her, and is abusing his presidential power. The Supreme Court has thus far agreed with this assertion, placing a hold on Cook’s firing until the case can be argued in January [5]. However, Cook is not the first member of the Reserve that Trump has taken issue with. For the past several months, Trump has conflicted with the Federal Reserve, pushing for the board to lower interest rates. The Reserve denied his request, citing fears of excessive inflation due to the increased inflationary expectations as a result of Trump’s tariff policy [6]. Trump turned his ire to the chairman of the Reserve’s Board, Jerome Powell.

Since April 2025, Trump has campaigned for Powell’s removal, dubbing him Jerome “Too Late” Powell on Truth Social [7]. At a Whitehouse press conference in April 2025, Trump was asked if he would fire Powell, where he responded, “If I want him out, he’ll be out of there real fast, believe me” [2]. Powell countered Trump’s threats, quoting the historical independence of the Federal Reserve and reminding Trump that he has no legal authority to fire him over policy disagreements. 

In opposition to Cook and Powell’ s cases, the Trump administration has referenced the Supreme Court’s recent decisions regarding Gwynne Wilcox and Cathy Harris. Wilcox and Harris were both leaders of historically independent federal agencies, the National Labor Relations Board and Merit Systems Protective Board respectively. Trump fired both Wilcox and Harris, citing policy disagreements [8]. Wilcox and Harris appealed to the Supreme Court. Chief Justice John Roberts wrote an emergency docket on the matter, saying that Trump was justified in his power “because the Constitution vests the executive power in the President, he may remove without just cause executive officers who exercise that power on his behalf” [9]. This ruling overturned precedent established in 1935 by the Supreme Court in Humphrey’s Executor v. United States, where the Court ruled that “illimitable power of removal is not possessed by the President” in respect to the Federal Trade Commission, International Criminal Court, and the Court of Claims [10].

The Supreme Court’s 6-3 split decision to allow Trump the power to fire independent government leaders poses an extreme threat to American democracy, especially when political polarization is at an all-time high [11]. Giving the president power to stack key financial institutions with whomever he pleases increases the partisanship of these institutions, making them more likely to act in accordance to a political party, rather than in the best interests of the American people. Hence, the overturning of the Humphrey decision in the Wilcox case presents a clear threat to the independence of all federal agencies. If we allow the president influence over the National Labor Relations Board and Merit Systems Board why not allow him power over the Federal Reserve as well? Why not allow him undisputable power over all federal agencies, why not allow him power over the courts? The implications of the Wilcox case are disastrous. The decision allows a dangerous overextension of presidential power, redefining checks and balances between the legislative and executive branches. Trump is unjustified in attempting to fire both Cook and Powell, as their roles are intended to be independent and the scope of the president’s  influence. Come January, it is crucial that the Supreme Court goes against their ruling in the Wilcox case and blocks Trump’s attempted termination of Cook. If the president can simply appoint and uproot whoever he wants to the Reserve at will, the possibility of corruption within the Reserve runs rampant, therefore increasing the possibility of long term economic harm for America for the sake of short-term presidential gain.

Photo Credits: https://upload.wikimedia.org/wikipedia/commons/8/8d/Marriner_S._Eccles_Federal_Reserve_Board_Building.jpg

Works Cited

[1] Trump, D. J. [@realDonaldTrump]. (2025).  Truth Social. https://truthsocial.com/@realDonaldTrump/posts/115174504752942494.
[2] Aamer Madhani, C. R., and Josh Boak (2025, April 17th, 2025). “Trump suggests he can removed Fed Chair Powell and says he’s ‘not happy’ with him over interest rates.” Retrieved September 12th, 2025, from https://apnews.com/article/trump-powell-federal-reserve-fed-termination-b6148c8048dda538a6ca3b5a270fd09e.
[3] (1913). Federal Reserve Act. U. S. Congress.  
[4] Wessel, D. (2025, May 23rd, 2025). “Why is the Federal Reserve independent, and what does that mean in practice?”. Retrieved September 12th, 2025, from https://www.brookings.edu/articles/why-is-the-federal-reserve-independent-and-what-does-that-mean-in-practice/.     
[5] Sherman, Mark. “Supreme Court Lets Lisa Cook Remain as a Federal Reserve Governor for Now in Unsigned Order.” PBS, Public Broadcasting Service, 1 Oct. 2025, http://www.pbs.org/newshour/politics/supreme-court-lets-lisa-cook-remain-as-a-federal-reserve-governor-for-now-in-unsigned-order. 
[6] Weissert, C. R. a. W. (2025, August 26th, 2025). “Trump says he’s firing Fed Governor Lisa Cook, opening new front in fight for central bank control.” Retrieved September 12th, 2025, from https://apnews.com/article/federal-reserve-lisa-cook-trump-6fca3d2fbb54ba204cc91398e6a7b020.
[7] Trump, D. J. [@realDonaldTrump]. (2025).  Truth Social. https://truthsocial.com/@realDonaldTrump/posts/115092130707196133.
[8] Andrea Hsu, M. M. (2025). Supreme Court allows Trump to fire members of independent agencies – for now. Morning Edition, National Public Radio.    
[9] (2025). Trump v. Gwynne A. Wilcox, US Supreme Court.
[10] (1935). Humphrey’s Executor v. United States, US Supreme Court.
[11] Marquez, M. M. a. A. (2023). “Here’s what’s driving America’s increasing political polarization.” Retrieved September 14th, 2025, from https://www.nbcnews.com/meet-the-press/meetthepressblog/s-s-driving-americas-increasing-political-polarization-rcna89559.