President Donald Trump’s administration has filed an appeal against a court ruling that blocked him from firing Federal Reserve Governor Lisa Cook.
The appeal came just hours after U.S. District Judge Jia Cobb issued the decision. The White House maintains that Trump has the authority to remove Cook, citing allegations from one of his appointees that she committed mortgage fraud on two properties purchased before joining the Fed.
The dispute could eventually reach the Supreme Court, where the conservative majority has allowed Trump to remove members of other independent agencies while hinting that his power over the Fed may have limits.
Cook’s attorneys argue that her firing was unlawful because presidents can only remove Fed governors for cause, typically defined as misconduct or poor performance during their time in office. Cobb agreed, ruling that the allegations did not meet the standard for removal.
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Cook is accused of designating two properties, in Michigan and Georgia, as primary residences, potentially lowering down payments and mortgage rates. She denies the claims and her legal team says she was denied a proper opportunity to respond before being terminated.
Trump has criticized Fed Chair Jerome Powell for not cutting the central bank’s short-term interest rate quickly enough. If Cook is removed, Trump could gain a 4-3 majority on the Fed’s governing board, shifting the balance of influence.
No president has attempted to fire a Fed governor before. Economists argue that central bank independence is crucial for making difficult decisions, such as raising interest rates to control inflation, without political interference.
Lisa Cook is expected to participate in the Fed’s upcoming meeting, where officials are likely to lower the key short-term interest rate by a quarter-point to between 4% and 4.25%.
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