Federal Court Halts Trump's Attempt to Fire Fed Governor Lisa Cook
In a dramatic turn of events, a US federal appeals court has blocked former President Donald Trump's attempt to remove Lisa Cook from the Federal Reserve's Board of Governors. The emergency ruling came just hours before the central bank's crucial two-day monetary policy meeting.
The decision, split 2-1 along party lines by the US Court of Appeals for the District of Columbia Circuit, represents a significant setback for the White House's efforts to exert control over the Fed and influence economic policy. Trump had sought to remove Cook based on allegations of mortgage fraud, despite no charges being filed against her.
The core of the dispute lies in the Federal Reserve Act, which stipulates that presidents can only dismiss Fed governors “for cause.” Trump's legal team argued that the mortgage fraud allegations constituted sufficient cause for Cook's dismissal. However, the court disagreed.
Judges Bradley Garcia and Michelle Childs stated in their opinion that the government failed to provide Cook with even minimal due process, including notice of the allegations and a meaningful opportunity to respond. They further noted that Cook is likely to succeed in her claims that she was removed without ‘cause’ and that her due process rights were violated.
Judge Gregory Katsas dissented, arguing that “President Trump removed Cook for cause.”
This ruling underscores the importance of an independent Federal Reserve and the legal safeguards in place to protect its members from political interference. The case highlights the ongoing tensions between the executive branch and the central bank, particularly concerning monetary policy decisions.
The court's decision followed Trump's earlier claim that he had fired Cook, prompting her to file a lawsuit alleging an unsubstantiated allegation and violation of her due process rights. The legal battle continues, with potentially far-reaching implications for the Fed's independence.