Fox News legal analyst Gregg Jarrett said on Fox Business Tuesday that the fate of embattled Federal Reserve Governor Lisa Cook comes down to a single question.
Trump fired Cook on Monday after citing allegations she falsified residency documents tied to mortgage fraud. In an appearance on “The Evening Edit,” Jarrett weighed in on the legal stakes surrounding Cook’s removal.
“The Supreme Court said that the president cannot fire a fed governor absent cause, so the central question will be was this sufficient cause?” Jarrett told guest host Jason Chaffetz.
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Jarrett said federal law allows a president to remove a Federal Reserve governor only for cause and added that if Cook falsified mortgage documents then her conduct could meet that threshold.
“The law says that any fed governor can be removed for cause, which is typically defined as malfeasance, gross negligence and gross misconduct. So under that standard, deceit and dishonesty qualifies. Lying and making false statements on mortgage documents to gain favorable loans and lower interest rates and so forth, is, at minimum, grossly negligent,” Jarrett said.
Jarrett said that under the law, a criminal charge isn’t necessary to justify removal and predicted that Cook’s legal challenge will ultimately land in the courts.
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“Of course, Lisa Cook hasn’t been charged criminally, but look at the law. That’s not a predicate under the statute for firing. It’s the act of misconduct that is operative, because the American people deserve to have confidence in members of the Fed, honest people and, of course, she’s vowing to sue. I’m sure she will, so the courts will have the final say,” Jarrett added.
Cook secured her seat on the Federal Reserve Board in 2022 after former President Joe Biden nominated her. Her mortgage fraud controversy isn’t an isolated case, Democratic California Sen. Adam Schiff is also under Department of Justice scrutiny for similar alleged conduct.
Friction between Trump and the Federal Reserve has escalated in recent months. Trump has repeatedly urged Fed Chairman Jerome Powell to slash interest rates, even as Powell has expressed concern about the economic turbulence Trump’s tariff might trigger. During a July 1 panel, Powell said the Fed would have already cut rates were it not for what he called the uncertainty caused by the new trade policies.
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