{"id":16409,"date":"2025-08-24T19:05:50","date_gmt":"2025-08-24T19:05:50","guid":{"rendered":"https:\/\/topat10.com\/?p=16409"},"modified":"2025-08-24T19:05:50","modified_gmt":"2025-08-24T19:05:50","slug":"the-federal-reserve-could-start-resembling-the-supreme-court","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=16409","title":{"rendered":"The Federal Reserve could start resembling the Supreme Court"},"content":{"rendered":"\n<p>As President Donald Trump ramps up pressure on the Federal Reserve, the typically staid, consensus-driven institution could take on some qualities of the more bitterly divided Supreme Court. <\/p>\n<div>\n<p>Since returning to the White House, he has demanded that the Fed cut rates and routinely insults Chairman Jerome Powell for not doing so. After teasing that he could fire Powell then backing off, Trump has <a href=\"https:\/\/fortune.com\/2025\/08\/22\/trump-says-fire-lisa-cook-federal-reserve-jerome-powell-jackson-hole\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/fortune.com\/2025\/08\/22\/trump-says-fire-lisa-cook-federal-reserve-jerome-powell-jackson-hole\/\" class=\"sc-19cc8fd2-0 kuWizV\">threatened to fire Fed Governor Lisa Cook<\/a> if she doesn\u2019t resign.<\/p>\n<p>For her part, Cook said she <a href=\"https:\/\/fortune.com\/2025\/08\/21\/fed-governor-lisa-cook-bullied-trump-mortgage-fraud\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/fortune.com\/2025\/08\/21\/fed-governor-lisa-cook-bullied-trump-mortgage-fraud\/\" data-type=\"link\" data-id=\"https:\/\/fortune.com\/2025\/08\/21\/fed-governor-lisa-cook-bullied-trump-mortgage-fraud\/\" class=\"sc-19cc8fd2-0 kuWizV\">won\u2019t be bullied into stepping down<\/a> and plans to rebut accusations of mortgage fraud from a Trump administration housing official. That\u2019s raised the question of how long she might choose to serve.<\/p>\n<p>Cook joined the Fed in 2022 after being tapped by President Joe Biden to fill an unexpired term that ended in 2024, then getting reappointed. So she can stay on the Fed board until 2038, though governors typically don\u2019t serve out their entire 14-year terms.<\/p>\n<p>\u201cHowever, the Fed has increasingly become a political football,\u201d Ian Katz, managing partner at Capital Alpha Partners, said in a note Wednesday. \u201cTrump has been clear that he wants to put loyalists on the board. As a result, some governors may choose to remain on the board until a president from their same political party is in the White House \u2014 making the Fed in that way more like the Supreme Court.\u201d<\/p>\n<p>Meanwhile, <a href=\"https:\/\/fortune.com\/2025\/08\/08\/trump-names-stephen-miran-federal-reserve\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/fortune.com\/2025\/08\/08\/trump-names-stephen-miran-federal-reserve\/\" class=\"sc-19cc8fd2-0 kuWizV\">Trump has named Stephen Miran<\/a>, chair of the White House\u2019s Council of Economic Advisers, to fill a vacancy on the board left by Adriana Kugler, who stepped down before her term was due to expire in January.<\/p>\n<p>He has backed Trump\u2019s call for lower rates. More notably, Miran also cowrote a paper in 2024 calling for an <a href=\"https:\/\/media4.manhattan-institute.org\/wp-content\/uploads\/reform-the-federal-reserves-governance-to-deliver-better-monetary-outcomes.pdf?secureweb=bplus64nance-to-deliver-better-monetary-outcomes.pdf?secureweb%3Dbplus64\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/media4.manhattan-institute.org\/wp-content\/uploads\/reform-the-federal-reserves-governance-to-deliver-better-monetary-outcomes.pdf?secureweb=bplus64nance-to-deliver-better-monetary-outcomes.pdf?secureweb%3Dbplus64\" class=\"sc-19cc8fd2-0 kuWizV\">overhaul of the Fed<\/a>\u00a0that reduces its independence.<\/p>\n<p>That could factor into Cook\u2019s decision on how long she will stay. In his note, Katz observed that \u201cgovernors in the past have stepped down without concern that the president would nominate a replacement who isn\u2019t a strong believer in Fed independence.\u201d<\/p>\n<p>Similarly, Powell\u2019s own plans have come under scrutiny. While his\u00a0<a href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/other20220523e.htm\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/other20220523e.htm\" class=\"sc-19cc8fd2-0 kuWizV\">term as board chair<\/a>\u00a0expires in May, his term as a governor extends to January 2028.\u00a0<\/p>\n<p>Treasury Secretary Scott Bessent has said Powell should step down as governor when his term as chairman ends, saying that has been the tradition. Powell has declined to say what he will do.<\/p>\n<p>The stakes could go well beyond how much the Fed lowers rates. Analysts at JPMorgan have even warned that Miran\u2019s appointment represents an <a href=\"https:\/\/fortune.com\/2025\/08\/09\/trump-fed-pick-stephen-miran-existential-threat-central-bank-independence\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/fortune.com\/2025\/08\/09\/trump-fed-pick-stephen-miran-existential-threat-central-bank-independence\/\" data-type=\"link\" data-id=\"https:\/\/fortune.com\/2025\/08\/09\/trump-fed-pick-stephen-miran-existential-threat-central-bank-independence\/\" class=\"sc-19cc8fd2-0 kuWizV\">\u201cexistential threat\u201d<\/a> to the Fed as it signals an intention to amend the Federal Reserve Act and alter the central bank\u2019s authority.<\/p>\n<h2 class=\"wp-block-heading\">Split decisions<\/h2>\n<p>It\u2019s not clear if Miran will be reappointed to the Fed board as the White House looks for someone to replace Powell as chairman. But either way, the Fed will have three Trump-appointed governors. <\/p>\n<p>To be sure, that\u2019s not enough to sway rate decisions on the 12-member Federal Open Market Committee, which is also comprised of regional Fed presidents. But if Trump is able to name a fourth governor, that\u2019s enough to tip the balance on the seven-member board.<\/p>\n<p>As <a href=\"https:\/\/www.axios.com\/2025\/08\/20\/lisa-cook-federal-reserve-trump-powell\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/www.axios.com\/2025\/08\/20\/lisa-cook-federal-reserve-trump-powell\" data-type=\"link\" data-id=\"https:\/\/www.axios.com\/2025\/08\/20\/lisa-cook-federal-reserve-trump-powell\" class=\"sc-19cc8fd2-0 kuWizV\"><em>Axios<\/em> recently pointed out<\/a>, a board majority would give Trump appointees power over the Fed\u2019s budgets, staffing, and even selection of regional Fed presidents. Those presidents are appointed by directors of the regional Fed banks, but they are <a href=\"https:\/\/www.federalreserve.gov\/faqs\/how-is-a-federal-reserve-bank-president-selected.htm\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/www.federalreserve.gov\/faqs\/how-is-a-federal-reserve-bank-president-selected.htm\" data-type=\"link\" data-id=\"https:\/\/www.federalreserve.gov\/faqs\/how-is-a-federal-reserve-bank-president-selected.htm\" class=\"sc-19cc8fd2-0 kuWizV\">subject to the approval of the board<\/a>. And in February, the five-year terms for all the bank presidents are\u00a0<a href=\"https:\/\/www.federalreserve.gov\/faqs\/what-is-the-process-for-reappointing-reserve-bank-presidents.htm\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/www.federalreserve.gov\/faqs\/what-is-the-process-for-reappointing-reserve-bank-presidents.htm\" class=\"sc-19cc8fd2-0 kuWizV\">scheduled to expire<\/a>.<\/p>\n<p>With composition of the Fed in flux, a more divided era may be looming that also resembles the Supreme Court.<\/p>\n<p>Fed rate decisions are usually unanimous with even one dissenting vote being rare. By contrast, the high court rarely has unanimous votes, while split decisions along ideological lines are common.<\/p>\n<p>July\u2019s Fed meeting may have been a preview of what\u2019s to come as two Trump-appointed governors voted to lower rates, going against the majority that kept rates steady.<\/p>\n<p>And although Powell\u00a0<a href=\"https:\/\/fortune.com\/2025\/08\/22\/powell-jackson-hole-shifting-balance-risks-september-rate-cut\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/fortune.com\/2025\/08\/22\/powell-jackson-hole-shifting-balance-risks-september-rate-cut\/\" class=\"sc-19cc8fd2-0 kuWizV\">opened the door to a rate cut<\/a>\u00a0at the September meeting, that doesn\u2019t guarantee a consensus either as other FOMC members still sounded hawkish, such as\u00a0<a href=\"https:\/\/www.cnbc.com\/2025\/08\/21\/kansas-city-feds-schmid-shows-hesitation-about-widely-expected-september-rate-cut.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/www.cnbc.com\/2025\/08\/21\/kansas-city-feds-schmid-shows-hesitation-about-widely-expected-september-rate-cut.html\" class=\"sc-19cc8fd2-0 kuWizV\">Kansas City Fed President Jeffrey Schmid<\/a>.<\/p>\n<p>That sets up <a href=\"https:\/\/fortune.com\/2025\/08\/23\/fed-rate-cut-outlook-jerome-powell-fomc-meeting-votes-inflation-jobs\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Go to https:\/\/fortune.com\/2025\/08\/23\/fed-rate-cut-outlook-jerome-powell-fomc-meeting-votes-inflation-jobs\/\" data-type=\"link\" data-id=\"https:\/\/fortune.com\/2025\/08\/23\/fed-rate-cut-outlook-jerome-powell-fomc-meeting-votes-inflation-jobs\/\" class=\"sc-19cc8fd2-0 kuWizV\">another FOMC meeting with dissenting votes<\/a>. In addition, the pace of any subsequent cuts isn\u2019t clear, providing more fodder for debate at the central bank as Trump-appointed officials push for dovish policy.<\/p>\n<p>Like the chief justice of the Supreme Court, the Fed chair represents just one vote but is also a first among equals who carried outsized influence. So whoever replaces Powell may need to rely on their powers of persuasion on a Fed with more conflicting views.<\/p>\n<\/div>\n<div data-cy=\"subscriptionPlea\"><strong>Introducing the 2025 Fortune Global 500<\/strong>, the definitive ranking of the biggest companies in the world. <a href=\"https:\/\/fortune.com\/ranking\/global500\/?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=plea_text\" target=\"_self\" aria-label=\"Go to https:\/\/fortune.com\/ranking\/global500\/?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=plea_text\" class=\"sc-19cc8fd2-0 kuWizV\">Explore this year&#8217;s list.<\/a><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>As President Donald Trump ramps up pressure on the Federal Reserve, the typically staid, consensus-driven institution could take on some qualities of the more bitterly divided Supreme Court. Since returning to the White House, he has demanded that the Fed cut rates and routinely insults Chairman Jerome Powell for not doing so. After teasing that [&hellip;]<\/p>\n","protected":false},"author":422,"featured_media":16410,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[123],"tags":[],"class_list":["post-16409","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Federal Reserve could start resembling the Supreme Court | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"Fed governors typically step down 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Ma","author_link":"https:\/\/topat10.com\/?author=422"},"uagb_comment_info":1,"uagb_excerpt":"As President Donald Trump ramps up pressure on the Federal Reserve, the typically staid, consensus-driven institution could take on some qualities of the more bitterly divided Supreme Court. Since returning to the White House, he has demanded that the Fed cut rates and routinely insults Chairman Jerome Powell for not doing so. 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