Trump can't pack the Fed board with allies now
· Axios
A recurring subplot of President Trump's term has been a desire to replace Biden appointees to the powerful Federal Reserve Board of Governors — even ahead of their terms ending — with allies. That effort now looks dead in the water.
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Why it matters: Even if Trump succeeds in his efforts to fire governor Lisa Cook, or to oust any of the other three Biden-era holdovers on the seven-member board, a Democratic Senate will likely block any replacements it views as insufficiently independent from the administration.
State of play: The president seeks to fire Cook — whose term runs through 2038 — for alleged mortgage fraud, an effort that has been blocked so far by the courts. The White House plans a hearing over the allegations next month.
- Former chair Jerome Powell has remained on the board as a governor, a term that ends in January 2028.
- Michael Barr, whom Biden appointed as top financial regulator, has remained in place as a governor in a term that extends to 2032.
- Philip Jefferson's term as vice chair ends this coming September, though his term as a governor extends to 2036.
Between the lines: It would break with current precedent for those officials to stick around to the end of their terms. In recent decades, Fed governor spots have turned over much more regularly, particularly after their time as chair or vice chair ends.
- Powell, Barr and Jefferson may feel greater comfort relinquishing their roles as governors before the end of their terms if they are confident the Senate will block any replacements who don't respect the tradition of central bank independence.
Of note: Sen. Elizabeth Warren is set to chair the Senate Banking Committee that must advance Fed governor nominees, and she has assailed chairman Kevin Warsh for being a "sock puppet" of the administration.
- Only one Senate Democrat, John Fetterman, voted to confirm Warsh.