If Cook’s dismissal is validated by the American courts, because she already advanced that she will prosecute it, Trump would give the opportunity to ensure a majority at the Board of Governors, composed of seven people.
Trump’s women (and women) in the Fed
Trump already has two “allies” at the Federal Reserve Board, Michelle Bowman and Christopher Waller, both appointed during their first mandate. Not so interestingly, They were the only members who opposed vote against keeping interest rates at the last meeting of the Fedmarking the highest level of dissent within the “Board” since 1993.
It is expected that Trump’s last candidate, Stephen Miran, who currently presides over the White House Economic Advisors Council, temporarily occupy a vacancy until the end of January. Will assume in replacement of Adriana Kuglerwho resigned before finishing his mandate, a situation that will allow the White House subsequently nominate a replacement for a complete period.
However, the Head of Research of Pepperstone Chris Wetson He raised in his latest report that “having four governors in their positions for so long, and that in essence they are seen as aligned with Trump’s wishes, the market perception of the market would further impact on a loss of the independence of the Central Bank.”
The importance of regional Fed to define the rate
Anyway, from Personal Investor Portfolio (PPI), they clarified that “Not even that control guarantees you to impose feat cuts”. They explained that the monetary policy is defined by the Federal Open Market Committee (FOMC), which in addition to the governors of the monetary authority includes the president of the Fed of New York and a rotating system of regional banks of banks, adding in total 12 votes.
“Thus, even with four loyal members, I would need at least three additional supports to achieve a majority, “argued the analysts of the Stock Societyalthough they added: “Where could immediate influence gain is in the functions of the Board of Directors: Banking regulation and approval or Veto of the Presidents of the Regional Fed every five years“
Wetson explained that the 12 regional members of the Fed face a “revalidation” in February 2026. “This time, there are real challenges, since the vote to keep them in their positions is decided by the seven governors of the Fed. This puts several regional members of the entity at risk of losing their positions in February 2026 and, subsequently, be replaced by regional governors related to Trump, “he argued.
To this is added that in May 2026 it is the date on which the presidency of Jerome Powell will end in the Fed, position that he said that he will not seek to renew, amid the constant attacks of the Republican President to his person.
“We could have a president of the Federal Reserve appointed by Trump, a major Pepperstone.
The impact on markets
In statements to the American press, the managing partner of Harris Financial Group, Jamie CoxHe argued that “Trump for the moment usurped the Fed future guidance function and announced to the markets that lower rates are coming, lower rates, what is manifested in a more pronounced performance curve, With short -term treasure bonds falling into minced”
In front, Wetson said that “if inflation is at 3.2 % and is increasing, while the labor market and growth remain resilient, and cut interest rates in a meeting without an obvious justification, markets would punish them for absolute erosion of credibility.” As a consequence, he added that “It would result in a massive sale of dollars and an exit from US assets: gold would shoot.”
Source: Ambito
