Court challenge?
Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, called Trump’s move “an authoritarian power grab that blatantly violates the Federal Reserve Act.”
She added in a statement that this “must be overturned in court.”
Trump has been ramping up pressure on the Fed this year, repeatedly criticizing its chief Jerome Powell for not lowering interest rates sooner despite benign inflation data.
Fed policymakers have been cautious in cutting rates as they monitor the effects of Trump’s tariffs on prices.
Trump has made no secret of his disdain for Powell, whom he has called a “numbskull” and “moron.”
Since its last reduction in December, the Fed has held rates at a range between 4.25 percent and 4.50 percent this year. Powell on Friday opened the door to lowering levels at the bank’s upcoming policy meeting in September.
Trump also previously suggested that what he called an overly costly renovation of the Fed’s headquarters could be a reason to oust Powell, before backing off the threat.
The president has picked Stephen Miran, the leader of his White House economic panel, to fill a recently vacated seat on the Federal Reserve board.
Cook took office as a Fed governor in May 2022 and was reappointed to the board in September 2023. She was sworn in later that same month for a term ending in 2038.
She has previously served on the Council of Economic Advisers under former president Barack Obama.
The Trump administration has pursued allegations of mortgage fraud against high-profile Democrats who are seen as political adversaries of the president.