Trump's fight with the Federal Reserve over Jerome Powell and Lisa Cook

Once in office, Trump demanded rate cuts. The Fed, concerned that his tariffs would raise inflation, held off making them for most of 2025.^[12][13] In April Trump said Powell's "termination cannot come fast enough," then said days later that he had "no intention" of firing him.^[14][15] In July, his budget chief said Powell had "grossly mismanaged the Fed" and attacked a $2.5 billion renovation of its headquarters. Powell asked the inspector general to review the project.^[16] Trump then visited the site with Powell and criticized its cost.^[17] The Fed cut rates three times between September and December 2025.^[18]

In August 2025, Trump turned to Lisa Cook, a governor appointed by Joe Biden in 2022. After Bill Pulte, the director of the Federal Housing Finance Agency, accused her of mortgage fraud and urged the Justice Department to investigate, Trump called on her to resign.^[19] On August 25 he said he had fired her, the first time a president had moved to fire a Fed governor.^[2] A loan document reviewed by Reuters showed that Cook had declared the Atlanta home at issue a "vacation home," undercutting the fraud claims.^[20] The Justice Department opened a criminal investigation of the mortgage allegations in September 2025.^[21]

Cook's case went to the Supreme Court. Cook sued, a federal judge blocked the firing, and an appeals court refused to lift that order.^[22][23][24] The Supreme Court left her in place while it took up the case,^[25] and on June 29, 2026, it ruled 5-4 for Cook and sent the case back to a lower court.^[4] Trump renewed the effort in August,^[3] and on October 9 he created a three-person committee to investigate the allegations, with a hearing planned for the following month.^[7] Cook's lawyer asked the White House to delay the November 5 hearing, alleging bias.^[26]

The pressure on Powell became a criminal matter in January 2026. He disclosed that the Justice Department had subpoenaed the Fed and threatened an indictment over his testimony about the renovation. He said the threat was meant to influence monetary policy, and Trump said he had no knowledge of the investigation.^[27][28] A federal judge quashed the subpoenas in March, finding that the investigation was likely politically motivated,^[29][30] and the US attorney, Jeanine Pirro, dropped it in April.^[5] At the end of September 2026, the Fed's inspector general found mismanagement of the renovation but no crime,^[31] and the Justice Department said it would not reopen the case.^[32] Trump called on Powell, whose term as chair had ended, to resign from the board.^[33]

The chair Trump chose has not delivered the cuts he wanted.^[34] Stephen Miran, a White House economic adviser, was confirmed to the board in September 2025,^[35] and Trump nominated Kevin Warsh, a former Fed governor, as chair in January 2026.^[36] The Senate confirmed Warsh 54-45 in May, after Thom Tillis, a Republican senator who had blocked the nomination, said two days after the Powell investigation was dropped that he would let it proceed.^[37][38] With inflation at its highest in more than three years, the Fed held rates steady at Warsh's first meeting in June, and Warsh said the central bank would remain independent.^[39][40] On September 16, its policy committee voted unanimously to raise rates for the first time since 2023.^[6] Trump called for cuts again and blamed the board rather than Warsh, saying the chair had "a very tough board."^[41] The rate decisions themselves are covered in a separate arc.