President Donald Trump’s long-running campaign to assert greater influence over the U.S. Federal Reserve may be producing the opposite outcome he intended. Instead of ushering in a more compliant central bank leadership, recent developments could result in Jerome Powell remaining as chair of the Federal Open Market Committee (FOMC) beyond the end of his term, while Stephen Miran, Trump’s closest ally within the Fed system, departs the institution altogether.
The unfolding situation highlights the tension between the White House and the Federal Reserve—an institution designed to operate independently of political pressure—and underscores how legal and political resistance may complicate Trump’s plans to reshape U.S. monetary policy.
Years of Conflict Between Trump and Powell
Trump has repeatedly criticized Powell since first nominating him during his earlier presidency, often using personal attacks and public pressure to express dissatisfaction with the Fed’s interest-rate decisions.
During the 2024 presidential campaign, Trump argued that interest rates should remain higher, claiming that rate cuts would artificially improve President Joe Biden’s economic standing. After returning to the Oval Office, however, Trump abruptly shifted his position, calling for lower rates to support growth and financial markets under his administration.
Since then, Trump has taken unprecedented steps to influence the central bank, including:
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Publicly pressuring Fed officials
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Threatening legal action
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Supporting criminal investigations into sitting Fed leaders
These actions have raised alarms among economists, investors, and lawmakers who view Fed independence as essential to economic stability.
Kevin Warsh Nomination Hits a Political Wall
Last week, Trump appeared to score a major victory by signaling his support for Kevin Warsh, a former Federal Reserve governor under Chairman Ben Bernanke, as Powell’s replacement when Powell’s term as Fed chair expires in May.
Warsh is seen as more dovish on interest rates than Powell, while still maintaining credibility with financial markets. His views on shrinking the Fed’s balance sheet are considered hawkish, but markets reacted calmly to the news, with only modest pressure on precious metal prices.
However, Warsh’s path to leadership has stalled.
Senate Democrats Block the Process
Warsh must first be approved by the Senate Banking Committee, but Democratic members have refused to move forward while criminal investigations involving current Fed leaders remain active.
In a joint statement, committee Democrats said:
“We demand that you delay any nomination proceedings for Mr. Warsh until after the pretextual criminal investigations involving Chair Powell and Governor Lisa Cook have been closed.”
Their objection centers on what they describe as politically motivated investigations, which they argue undermine confidence in any nomination tied to the current administration.
Legal Pressure on Fed Leaders Intensifies
At present, two members of the FOMC are facing legal scrutiny:
Jerome Powell
Earlier this month, Powell confirmed he is under criminal investigation by the Department of Justice related to testimony he gave before Congress regarding renovations to Federal Reserve buildings. The project’s cost overruns have become a recurring point of contention between Powell and Trump.
The dispute escalated publicly in July, when the two clashed—on camera—over whether renovation budgets had been exceeded.
Governor Lisa Cook
Fed Governor Lisa Cook is also under legal challenge. Trump attempted to remove her from her position in September, alleging she had fraudulently obtained favorable mortgage terms prior to joining the Fed.
The U.S. Supreme Court blocked the attempt, allowing Cook to remain in her role while denying the administration’s request for removal. Cook has strongly denied the allegations.
Powell May Stay Longer Than Expected
Because Democrats are unwilling to advance Warsh’s nomination while these investigations continue—and Trump has shown no indication of dropping them—economists now see a scenario in which Powell remains in charge longer than planned.
UBS Chief Economist Paul Donovan noted in a briefing to clients that while Democratic resistance was expected, it could have unintended consequences for Trump:
“This raises the prospect of Chair Powell staying on as FOMC chair (not Board of Governors chair) beyond May.”
In practical terms, Powell could continue guiding interest-rate decisions even after his formal term as chair expires, maintaining continuity at the central bank.
Stephen Miran Resigns, Reducing White House Influence
While Powell’s position appears more secure, Trump’s most loyal supporter within the Fed system is stepping away.
Stephen Miran, who had been serving simultaneously as:
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A Federal Reserve Board member (temporary replacement)
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Chairman of the White House Council of Economic Advisers (CEA)
formally resigned from the CEA this week.
Miran was initially nominated to the Fed to temporarily replace Governor Adriana Kugler, whose term ended in January. He previously stated that if his Fed role extended beyond that date, he would resign from his White House position—a promise he has now kept.
Although it remains unclear whether Miran will receive a permanent Fed nomination, his resignation marks a symbolic distancing between the White House and the Federal Reserve, reinforcing the institution’s legal mandate for independence.
White House Responds
White House spokesman Kush Desai confirmed Miran’s departure, emphasizing his contributions to the administration:
“Prior to the start of Stephen’s leave last September, his brilliant insights and powerful advocacy on behalf of the president made him an enormous asset for the White House, and he established himself as a key member of the Trump administration’s economic team.”
A Strategy That May Have Misfired
Taken together, these developments suggest Trump’s aggressive approach to reshaping the Federal Reserve may be backfiring. Instead of accelerating leadership change and exerting greater control over monetary policy, the administration now faces:
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A stalled nomination
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Legal battles that strengthen opposition
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The potential extension of Powell’s influence
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The exit of a trusted ally from the Fed ecosystem
For now, the Fed’s independence—long a cornerstone of U.S. economic governance—appears more resilient than Trump anticipated.
This story was originally reported by Fortune and has been expanded with additional context and analysis.
