Federal Reserve Governor Lisa Cook is fighting back against the Trump administration's attempt to remove her from her position. In a significant legal challenge, Cook's legal team filed an appeal, urging a U.S. appeals court to reject the administration's request to overturn a lower court ruling. This action comes just days before the Federal Reserve's crucial interest rate decision.
The Trump administration's attempt to remove Cook is unprecedented and raises serious concerns about the independence of the Federal Reserve. Cook's lawyers argue that the administration hasn't provided sufficient grounds for her dismissal, emphasizing the potential economic instability that could result from politically motivated removals of Fed governors. They contend that allowing such actions sets a dangerous precedent, jeopardizing the Fed's ability to operate free from political interference.
The core of the dispute centers around accusations of mortgage fraud leveled against Cook by the Trump administration. These accusations relate to Cook's alleged misrepresentation of property ownership prior to her appointment to the Fed's board. Cook vehemently denies these charges, and a U.S. District Court judge previously ruled that the administration failed to meet the legal standard for removing a Fed governor. This ruling, however, is now being contested by the Trump administration.
The timing of the legal battle is critical. The Federal Reserve is scheduled to make a pivotal interest rate decision in the coming days, and Cook's presence on the board is vital. If the appeals court sides with the Trump administration, Cook would be removed pending the final resolution of the case, potentially influencing the upcoming decision. The administration's appeal seeks an emergency ruling, aiming to remove Cook before the meeting. A decision in Cook's favor could still lead to a further appeal to the Supreme Court.
The situation underscores the ongoing tension between the Trump administration and the Federal Reserve, particularly regarding interest rate policy. The administration previously pressured the Fed to cut interest rates, while the Fed maintained a steady approach amid concerns about inflation and economic uncertainty. This legal battle adds another layer of complexity to the already challenging economic landscape.
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Originally published at: https://www.cnbc.com/2025/09/13/trump-fed-lisa-cook-appeals-court.html
