On Friday, a Lisa Cook lawyer asked a US judge to let the Federal Reserve’s governor keep her job while fighting President Donald Trump’s attempt to dismiss her in a breathtaking attack on the independence of the central bank.
The case before the US district court in Washington DC could give Trump an extensive power over the FED, which has traditionally been shielded from political pressure because it makes hard, complicated decisions about whether interest rates to combat inflation should be increased, or to lower them to promote attitude and economic growth.
Trump tried to relieve Koch because of allegations that she was asking for mortgage fraud when she bought a house and apartment in 2021, a year before President Joe Biden appointed her to the Fed’s Board of Directors.
Trump has repeatedly criticized the Fed – and its chairman Jerome Powell – to reduce interest rates. This year, the central bank left its benchmark set unchanged, sometimes because it is waiting to see whether the enormous taxes -tariffs -that Trump is striking on foreign products that drives inflation higher. Together with most board members, Cook voted against a cut.
Arguments before the court on Friday concentrated on what “Cause” is, in this case the unproven allegations of the mortgage fraud.
In an exchange with the US district judge Jia Cobb, Cook’s lawyer Abbe David Lowell said that Trump’s motivations were clear. “He has already said that he wants a majority (on the Fed board).
If Cooks should be shooting, it would probably undermine the Fed’s many years of independence from daily politics. No president has ever released a Fed governor in the 112-year history of the agency. Economists support independence because it makes it easier for the central bank to take unpopular steps such as increasing interest rates.
Cook asked the court to issue an emergency command that would relieve them and enable them to remain in the seven member of the governor board, while their complaint against dismissal rides the shot through the dishes. The case can end in front of the US Supreme Court.
The judgment of the district court can only be expected after the laboratory’s day – although judge Cobb said she would try to accelerate the case.
In court on Friday, the Yaakov Roth complained to the Ministry of Justice, who represented the Trump administration at the hearing, that Cook had not offered any explanation for something in her mortgage documents or defense against the allegations of fraud.
The allegations only remain in such a way that Bill Pult, Trump’s appointment of the agency, which monitors the mortgage giants Fannie Mae and Freddie Mac.
And in overdue Thursday, Pult said that Cook was supposedly affected in April 2021 on a third property, a condominium in Cambridge, Massachusetts.
Pult said in a social media post that Cook classified the apartment as a “second home”, but in financial disclosure documents that were submitted to the government in 2022 to 2025, she described it as a “investment/rent”. Pult added that mortgage interests and down payments for second houses can be lower than for investment properties.
Pult also claimed without evidence that Cook may have rented two properties in Ann Arbor, Michigan, and Atlanta, who were the focus of a criminal transfer that he made last week and which he claimed as the main residence.
In an explanation, Cook’s lawyer, Lowell, “an obvious compression campaign that aims to discredit governor Cook … nothing in these vague, unfounded allegations for the role of governor Cook in the Federal Reserve and they justify their distance from the board.”
The law that the Fed rules says that the president cannot dismiss a governor just because he does not agree to interest policy. Trump has repeatedly demanded that the FED reduce its key, which is currently 4.3%. But the Fed left it unchanged for the last five sessions.
The president can be able to relieve a FED governor “from the matter”, who has traditionally been interpreted as inefficiency, forgetfulness or misconduct. Cook’s lawyers argue that it only refers to behavior in office. They also say that they were entitled to a hearing and an opportunity to refute the indictment.
“The unfounded and unproven claim that Governor Cook may” have “filled out a mortgage form before its confirmation of the Senate” – is not too “cause”, “the lawsuit says.
Trump has tried to relieve a number of leaders from a enormous number of independent federal regulatory authorities, including the National Transportation Safety Board, the Surface Transportation Board, the Equal Employment Opportunity Commission and the Nuclear Regulatory Commission and Fed.
The Supreme Court refused to temporarily block the president from the release of directors of some independent agencies, while these cases go through the dishes. According to legal experts, the High Court has shown more consideration for the president’s distance powers this year than in the past.
In one case in May, however, the Supreme Court seemed to earn the Fed as a greater independence than other agencies and described it as “a uniquely structured, quasi-private unit”. As a result, it is more hard to assess how the Supreme Court could decide if this case ends up in its lap.
The indictment of Pult that Cook has committed mortgage fraud is one whom he also raised against two of the greatest political enemies of Trump, the democratic Senator Adam Schiff, and the New York general attorney Letitia James, who has pursued Trump. Pulte has ignored a similar case with Ken Paxton, the Attorney General in Texas, who is friends with Trump and runs for the Senate in the Republican area code of his state.
The complaint from Cook replies on the grounds that the claims are only an excuse “to make their immediate removal and to clear a seat for President Trump to fill his agenda and forward in order to undermine the independence of the Federal Reserve”.
If Trump can replace Cook, he may be able to win a 4: 3 majority on the fed government board. Trump appointed two board members during his first term and nominated an essential economic advisor to the White House, Stephen Miran, to replace Adriana Kugler, another Fed governor who unexpectedly resigned on August 1st.
