Trump urges judge to block Lisa Cook’s bid to stay at Fed
President Donald Trump has asked a federal judge to block Federal Reserve Governor Lisa Cook from resuming her duties. The move comes as the court weighs whether Trump had the constitutional authority to dismiss her earlier this week.
The case is unprecedented. No U.S. president has ever attempted to remove a sitting member of the Federal Reserve’s Board of Governors. Its outcome could reshape the balance of power between the presidency and the central bank, which was designed to operate independently of political influence.
Arguments were heard on Friday by U.S. District Judge Jia Cobb in Washington. She heard from lawyers for Trump and for Cook during a hearing that stretched to nearly two hours. Cobb requested further filings from both sides by Tuesday.
The judge did not immediately rule. Instead, she said she would make up her mind before the Fed’s next policy meeting, on Sept. 17. The meeting is key partly because if she were to be reinstated, Cook would vote on interest rates as one of 12 Federal Open Market Committee members.
Trump’s legal team described Cook’s claim as “meritless” and unlikely to succeed, arguing that the president had the authority to fire her “for cause” and that the evidence supporting his action was strong.
Cook’s attorneys argued that her due process rights had been violated. They noted that she never had an opportunity to defend herself against the charges and warned that upholding Trump’s action would undermine the Fed’s independence.
Trump uses mortgage allegations to justify firing
The firing came after accusations from Bill Pulte, a Trump supporter and head of the Federal Housing Finance Agency, that Cook lied on mortgage applications. He accused her of describing two properties as her “principal residence” in 2021, which entitles someone to better terms on a loan.
This week, Pulte added a new allegation, claiming Cook had also labeled a third property as her second home. He referred all three claims to the Justice Department, though Cook has not been charged with any crime.
Trump pounced on Pulte’s claims in a letter he posted to Truth Social, stating that Cook had been fired “for cause.” In practice, the term is reserved for the most serious cases of malfeasance and has never before been adjudicated by a court as it applies to a Fed governor.
Cook has rejected the allegations. She said she has “no wish to be bullied” out of her job, and in the week since the complaints were reported, she has sought to deliver correct details about her financial history.
Trump tests central bank independence
Now the case is shining a light on the independence of the Federal Reserve. For more than 100 years, presidents have refrained from direct intervention in the makeup of the Fed’s board. Trump’s decision to fire Cook violates that tradition.
Judge Cobb also expressed skepticism at elements of both sides’ arguments. She pressed Trump’s lawyers about what the president — and the president alone — can determine as “cause.” She also raised concerns about whether Cook had been adequately notified before her dismissal.If Cobb ruled against Trump, Cook would surely get her seat back, at least for now. If she favors the president, Cook would remain removed, and the case could move toward a full trial or possibly the Supreme Court.
The ruling is of enormous significance for financial markets. The Fed has held interest rates steady at 4.25–4.5 percent this year despite pressure from Trump to reduce them. The president has also repeatedly lashed out at Jerome Powell, who chairs the Fed, calling him a “numbskull” for not cutting the cost of borrowing.
As the legal fight continues, Cook is kept out of her office. Her future, and the power balance between the White House and the Federal Reserve, will rest on Judge Cobb’s ruling, expected in the next few days.
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Trump urges judge to block Lisa Cook’s bid to stay at Fed
President Donald Trump has asked a federal judge to block Federal Reserve Governor Lisa Cook from resuming her duties. The move comes as the court weighs whether Trump had the constitutional authority to dismiss her earlier this week.
The case is unprecedented. No U.S. president has ever attempted to remove a sitting member of the Federal Reserve’s Board of Governors. Its outcome could reshape the balance of power between the presidency and the central bank, which was designed to operate independently of political influence.
Arguments were heard on Friday by U.S. District Judge Jia Cobb in Washington. She heard from lawyers for Trump and for Cook during a hearing that stretched to nearly two hours. Cobb requested further filings from both sides by Tuesday.
The judge did not immediately rule. Instead, she said she would make up her mind before the Fed’s next policy meeting, on Sept. 17. The meeting is key partly because if she were to be reinstated, Cook would vote on interest rates as one of 12 Federal Open Market Committee members.
Trump’s legal team described Cook’s claim as “meritless” and unlikely to succeed, arguing that the president had the authority to fire her “for cause” and that the evidence supporting his action was strong.
Cook’s attorneys argued that her due process rights had been violated. They noted that she never had an opportunity to defend herself against the charges and warned that upholding Trump’s action would undermine the Fed’s independence.
Trump uses mortgage allegations to justify firing
The firing came after accusations from Bill Pulte, a Trump supporter and head of the Federal Housing Finance Agency, that Cook lied on mortgage applications. He accused her of describing two properties as her “principal residence” in 2021, which entitles someone to better terms on a loan.
This week, Pulte added a new allegation, claiming Cook had also labeled a third property as her second home. He referred all three claims to the Justice Department, though Cook has not been charged with any crime.
Trump pounced on Pulte’s claims in a letter he posted to Truth Social, stating that Cook had been fired “for cause.” In practice, the term is reserved for the most serious cases of malfeasance and has never before been adjudicated by a court as it applies to a Fed governor.
Cook has rejected the allegations. She said she has “no wish to be bullied” out of her job, and in the week since the complaints were reported, she has sought to deliver correct details about her financial history.
Trump tests central bank independence
Now the case is shining a light on the independence of the Federal Reserve. For more than 100 years, presidents have refrained from direct intervention in the makeup of the Fed’s board. Trump’s decision to fire Cook violates that tradition.
Judge Cobb also expressed skepticism at elements of both sides’ arguments. She pressed Trump’s lawyers about what the president — and the president alone — can determine as “cause.” She also raised concerns about whether Cook had been adequately notified before her dismissal.If Cobb ruled against Trump, Cook would surely get her seat back, at least for now. If she favors the president, Cook would remain removed, and the case could move toward a full trial or possibly the Supreme Court.
The ruling is of enormous significance for financial markets. The Fed has held interest rates steady at 4.25–4.5 percent this year despite pressure from Trump to reduce them. The president has also repeatedly lashed out at Jerome Powell, who chairs the Fed, calling him a “numbskull” for not cutting the cost of borrowing.
As the legal fight continues, Cook is kept out of her office. Her future, and the power balance between the White House and the Federal Reserve, will rest on Judge Cobb’s ruling, expected in the next few days.
The smartest crypto minds already read our newsletter. Want in? Join them.
Read More
Hearing for Fed Governor Lisa Cook’s Lawsuit Against Trump Turns out to Be a Nothingburger