Trump petitions Supreme Court for validity of his dismissal of Federal Reserve official, Lisa Cook
In a recent development, the U.S. Court of Appeals for the D.C. Circuit has rejected President Trump's appeal against the disqualification of Lisa Cook, a Federal Reserve governor. This decision follows a ruling by U.S. District Judge Jia Cobb, who blocked Cook's removal, stating the firing was illegal and that Cook had been denied due process.
The controversy surrounding Cook began in August 2021, when Bill Pulte, Trump's director of the Federal Housing Finance Agency, accused her of mortgage fraud. The allegations involved two housing loans: one for $203,000 in Ann Arbor, Mich., and another for $540,000 in Atlanta. Cook's attorneys stated she told the lender her Atlanta condo would be a vacation home.
Trump sent Cook a letter on Aug. 25, stating she could be removed for cause. However, Cook filed a suit to challenge the decision, arguing the allegation did not amount to cause under the law. The law does not define what amounts to cause for removal of a Fed governor, which has led to a legal grey area in this case.
Trump's lawyers argue that a Fed governor has no legal right to challenge the president's decision to fire her. Solicitor Gen. D. John Sauer wrote that the appeal "involves yet another case of improper judicial interference with the President's removal authority."
The Federal Reserve Act of 1913 intended to give the central bank board some independence from politics and the current president. If Cook is ousted, Trump could soon have a majority on the Federal Reserve Board. This could potentially allow him to influence monetary policy, including the ability to raise or lower interest rates.
This is not the first time Trump has sought to assert his power over the Federal Reserve. The appeal is the second this month asking the court to give Trump broad new power over the economy. The new case could determine if Trump is free to remake the Federal Reserve Board by removing a Democratic appointee who he says may have broken the law.
Meanwhile, Stephen Miran, one of Trump's top economic advisors, was confirmed to serve a temporary term on the seven-member Federal Reserve Board this week. The confirmation adds another layer of political influence to the central bank.
As the legal battle continues, the future of Lisa Cook and the independence of the Federal Reserve remain uncertain. This development is being closely watched by economists, political analysts, and the general public as it could have significant implications for the U.S. economy.
