Following their monthlong August recess, key members of the Senate GOP largely avoided criticizing President Donald Trump’s recent decision to fire Fed Governor Lisa Cook. The move, which comes amid heightened scrutiny of the president’s executive authority over the Federal Reserve, has sparked a significant debate within the Senate Banking Committee and broader congressional circles. Sen. John Kennedy (R-La.), a senior member of the committee, stressed the importance of Fed independence, stating, “I believe in Fed independence,” while deferring questions about the legality of the firing to the courts.
Trump’s decision to remove Cook, an appointee of President Joe Biden, came on allegations of mortgage fraud. Cook has since filed a lawsuit to block the firing, arguing that the president lacks the legal authority to remove a Fed governor. Sen. Mike Rounds (R-S.D.), another influential Banking Committee member, echoed the importance of Fed independence, noting that it is critical to the president’s long-term economic success and the global demand for U.S. Treasuries.
The controversy has intensified as the Senate prepares to move forward with Trump’s nominee for a separate Fed board seat, Stephen Miran. Anticipated to appear before the Banking panel on Thursday, Miran is set to face rigorous questioning about the independence of the central bank. Miran, who currently chairs Trump’s Council of Economic Advisers, is already on Capitol Hill, with Rounds planning to meet with him Tuesday evening, and Sen. Katie Britt (R-Ala.) scheduled to meet with him on Wednesday. Rounds emphasized the importance of ensuring Miran understands the significance of Fed independence to the president’s economic plans.
Democrats have called for a delay in the Miran confirmation hearing, citing concerns about the legality of Trump’s firing of Cook. Sen. Mark Warner (D-Va.), a member of the Banking panel, expressed disappointment with his Republican colleagues, stating, “I don’t know how you move forward when I think the president is trying to illegally fire a Fed member.” He criticized the GOP for their apparent lack of support for the business community and the Fed’s independence.
Meanwhile, some Republicans have more explicitly endorsed Trump’s actions. Sen. Bill Hagerty (R-Tenn.) described the allegations against Cook as “egregious,” while Sen. Cynthia Lummis (R-Wyo.) emphasized the importance of legal compliance, stating, “If they operate independently outside of the law, then that independence is not earned.” Lummis acknowledged there was a “legitimate issue” at play, signaling a nuanced stance within the party.
This unfolding drama highlights the deepening divide within the Senate over the scope of presidential power and the role of the Federal Reserve in shaping U.S. economic policy. As the situation develops, the implications for the Fed’s independence, the legal battle over Cook’s firing, and the confirmation of Miran will all shape the trajectory of U.S. monetary policy in the coming months.