Trump confronted with lawsuit by Fed governor Lisa Cook alleging unlawful and unparalleled attempt to terminate her employment
Federal Reserve Governor Lisa Cook, the first Black woman to serve on the board of the world's most important central bank, has filed a lawsuit against President Donald Trump, seeking an emergency temporary restraining order and a declaration that his removal attempt is unlawful.
The lawsuit, filed on Thursday, argues that Trump's attempt to remove Cook from the Federal Board of Governors is a violation of the Federal Reserve Act, which states that Federal Reserve governors can only be removed for cause (wrongdoing).
Trump's letter to Cook alleges potential false statements on mortgage applications as cause for removal. However, it is important to note that Cook hasn't been charged with any crime.
The lawsuit emphasizes the importance of an independent Federal Reserve for a stable economy and notes a recent Supreme Court decision that considers the Fed a "uniquely structured, quasi-private entity" with its own distinct historical tradition.
The lawsuit further argues that allowing the President to remove members of the Board over policy disagreements would undermine the Board's independence. This assertion comes amidst Trump's attacks against Federal Reserve Chair Jerome Powell and the Fed's rate-setting committee.
In an additional filing, Cook's lawyers argue that the President and Federal Housing Finance Authority Director Bill Pulte, who started the efforts to remove Cook on Aug. 20, have not explicitly alleged intentional errors.
The Federal Reserve Board of Governors and Chair Jerome Powell are named as defendants in the lawsuit. The White House asserts that Trump exercised his lawful authority to remove Cook for cause.
A hearing about the lawsuit is set for 10 a.m. E.T. Friday in Washington. Unfortunately, the name of the judge who will hold the hearing is not yet known.
The Fed has stated that it will abide by any court decision regarding Cook's removal. Trump's long history of attacks against the Fed and his threats to fire Powell are cited in Cook's lawsuit.
Trump's efforts to remove Cook over allegations closely resemble similar unsubstantiated claims against other top Democrats. It is a significant development in the ongoing tension between the President and the Federal Reserve.
This article will be updated as more information becomes available.
