In an escalating legal clash over the Federal Reserve’s independence, the Trump administration has appealed to the nation’s highest court to remove Governor Lisa Cook from her position.
The legal battle over the independence of the Federal Reserve escalated Thursday as the Trump administration formally asked the Supreme Court to block the reinstatement of Fed Governor Lisa Cook.
The Trump administration’s petition to the Supreme Court marks the latest development in an unprecedented and contentious legal fight that has raised fundamental questions about the central bank’s independence.
This move comes after a federal appeals court on Monday declined to reverse a lower court order that allowed Cook to remain on the board.
The Administration’s Argument
The administration’s request argues that Cook should be removed from her post due to alleged mortgage fraud that took place before she was appointed to the Fed. The president, Donald Trump, fired Cook in August based on a criminal referral from Federal Housing Finance Agency (FHFA) director Bill Pulte.
“That the Federal Reserve Board plays a uniquely important role in the American economy only heightens the government’s and the public’s interest in ensuring that an ethically compromised member does not continue wielding its vast powers,” the administration’s petition stated. The Solicitor General, John Sauer, also argued that the president’s decision to remove officers “for cause” is not subject to judicial review.
Cook’s Challenge and Court Rulings
Cook, an appointee of former President Joe Biden, has vehemently denied the allegations and filed a lawsuit on August 28, calling her removal “unprecedented and illegal.” A federal district court judge, Jia Cobb, temporarily blocked her dismissal, arguing that the alleged misconduct happened before she took office and that she was not given sufficient due process.
The judge’s order was upheld by a federal appeals court earlier this week, setting the stage for the Supreme Court to weigh in on the matter. Cook’s legal team has maintained that the administration’s claims are a pretext for a politically motivated firing to undermine the Fed’s autonomy.
Broader Implications for the Fed
The dispute has drawn significant attention because it challenges the long-held principle of Federal Reserve independence from political pressure. Congress created the Fed with a structure designed to insulate it from day-to-day political whims, including a provision that allows a president to remove a governor only “for cause.”
This is the first time in the Fed’s 112-year history that a president has attempted to fire a sitting governor. The case will likely test the legal limits of presidential authority over an institution that plays a critical role in managing the U.S. economy, including setting interest rates. This legal showdown comes on the heels of the Fed’s recent decision to cut its key interest rate for the first time this year, a move President Trump has repeatedly called for.
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