President Trump said he is weighing replacements for Federal Reserve Governor Lisa Cook, who he says he fired. Reports say Stephen Miran and David Malpass are in the frame, with Trump adding, “We have some very good people for that position,” and “Maybe in my own mind, I have somebody that I like.”
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Miran is already nominated for a different board seat that expires in January. Trump said he “might switch him to the other one, it’s a longer term.” Malpass, the former World Bank president, has criticized the Fed for not cutting rates more, which lines up with the White House push for quicker easing.
Legal Fight Decides If There Is a Vacancy
Whether there is a seat to fill remains unsettled. Lisa Cook’s counsel, Abbe David Lowell, says Trump has no authority to remove her and plans to challenge the action in court. The Fed has said it will follow whatever the courts decide.
That court path will set the timeline. If Cook stays, the board math does not change right away. If the court clears a removal or a resignation follows, the White House moves from talk to action.
Trump Signals a Drive for a Fed Majority
On Tuesday, Trump said, “We’ll have a majority very shortly.” This message tells markets the White House wants firm influence over rate decisions, not just gentle nudges.
A majority would tilt the Fed firmly in Trump’s direction. Miran is already nominated to replace Adriana Kugler. If another Trump ally steps into Cook’s seat that runs until 2038, the Fed could tilt toward faster cuts and looser financial conditions.
Markets Game Out the Rate Path
Investors are already gaming the downside in yields and the upside in rate-sensitive stocks if White House-aligned governors dominate the board. Lower short-term rates tend to help tech, housing, and small caps, while cheaper funding can lift risk appetite across the tape.
There is a catch. If markets think the Fed will not push back when inflation runs hot, long-term yields can rise even as short rates fall. This type of mix supports near-term rallies but can weaken the dollar’s appeal and raise borrowing costs down the curve.
Overall What Does This Mean?
The story is bigger than one seat. A court fight over removal power, plus a slate of nominees who favor quicker easing, points to a Fed that could lean more political and less data-first. This path supports a short burst of easy money but risks a credibility hit if inflation flares again.
Investors need to stay balanced. Rate-sensitive stocks may keep climbing, but hedges matter if volatility jumps.