Cat still scared of puppy

Hi all, my puppy is a 9 month old foxhound/aussie mix who is just starting to show signs of herding instincts. We adopted her in May when she was 10 weeks old and for the first 3 months we had the house all gated off and her on a leash at all times around the cats. (We have two cats) Our puppy currently free roams when we are supervising but the house is still gated off to certain rooms for the cats to go as they please.

Our 2 year old cat who is a very loving boy, instantly took to her and will come up and headbutt her, she no longer has interest in chasing him because he’s always hanging around in the same area.

Our 1 year old cat who is the queen of the house has been having a much more difficult time. The closest she will come to the puppy is if she can be 10 ft away and up high. She has learned she’s allowed to hiss and scratch the puppy if she gets too close, which is often when our cat is hiding under furniture and our puppy shoves her head under to see her. Our cat will approach her when she is sleeping to take a sniff but will always go back into hiding after.

I am starting to get worried that our puppy is viewing our cat as a toy she can’t have, or maybe even a prey thing. She’s started locking in on her and will try to chase her, they even do a stare down between the two of them when our cat is out of reach.

I’m starting to feel really bad for our cat as her life has shifted so much, when our puppy is in the crate our cats come out and have a great time but the one immediately goes back into hiding while our boy cat is unbothered. We’ve had our puppy for almost 7months now and I thought there would be more progress.

I have gone back to leashing her while our cat is in the same area and I always reward her for being calm around the cats but this just doesn’t seem to be improving.

Our cats were here first and I would hate to rehome our puppy because of that but I feel like I am trying everything to make it a safe space for all of them. I really thought after almost 7 months they would be fine.

Ugh sorry this was so long but thanks for reading. Any advice on this situation??