\n<\/p>\n
The Federal Reserve governor Lisa Cook has filed a lawsuit against Donald Trump over his \u201cunprecedented and illegal attempt\u201d to fire her, calling it an attempt to undermine the central bank\u2019s independence.<\/p>\n
The lawsuit \u2013 filed by Cook in federal court in Washington on Thursday \u2013 sets the stage for a legal battle over the US president\u2019s extraordinary push for greater control of the central bank.<\/p>\n
A federal judge scheduled a hearing for the case on Friday at 10 am ET, with the case likely to end up at the supreme court.<\/p>\n
Trump tried to dismiss Cook on Monday, announcing that he was removing her from her position on the Fed\u2019s board of governors \u201ceffective immediately\u201d over an unconfirmed allegation from one of his allies that she had obtained a mortgage on a second home she incorrectly described as her primary residence.<\/p>\n
But Cook stood her ground, arguing that Trump had \u201cno authority\u201d to fire her. \u201cI will continue to carry out my duties to help the American economy,\u201d she said.<\/p>\n
Cook is a member of the Federal Reserve\u2019s board of governors, who serve in the Fed\u2019s Federal Open Market Committee (FOMC), which votes to set interest rates. Cook was appointed to her role in 2022 by Joe Biden.<\/p>\n
The lawsuit, filed on her behalf in Washington DC federal court, asks judges to void Cook\u2019s firing, arguing it was not in Trump\u2019s power to fire her and that it would be \u201cthe first of its kind in the board\u2019s history\u201d.<\/p>\n
An unintentional \u201cclerical error\u201d might lie behind the allegations leveled by the administration, Cook\u2019s lawyers suggest in the filing.<\/p>\n
The complaint cites the Federal Reserve Act (FRA), noting the 1913 law that created the Fed \u201cexplicitly requires a showing of \u2018cause\u2019 for a governor\u2019s removal\u201d.<\/p>\n
\u201cAn unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not [cause],\u201d court filings said. \u201cPresident Trump\u2019s letter purporting to fire Governor Cook did not cite appropriate cause for removing her from the board of governors.\u201d<\/p>\n
Cook\u2019s lawyers also said her removal violated her fifth amendment due process rights to a notice and hearing under the FRA. Instead of receiving official notice, Cook \u201cfound out about the attempt to remove her through President Trump\u2019s Truth Social post\u201d.<\/p>\n
In a statement, a White House spokesperson, Kush Desai, argued that Trump\u2019s removal of Cook was legal under US law and that the president \u201cdetermined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions\u201d.<\/p>\n
\u201cThe removal of a governor for cause improves the Federal Reserve board\u2019s accountability and credibility for both the markets and American people,\u201d Desai said.<\/p>\n
The lawsuit includes a section detailing the legal and historical background of the Fed\u2019s independence as the central bank, arguing that the \u201cfor cause\u201d removal protections have been a \u201cbulwark of the Federal Reserve\u2019s independence for the past century\u201d.<\/p>\n
The mortgage allegations are \u201cpretextual\u201d, the lawsuit claims, and part of a broader attempt by Trump to obtain a vacant board seat \u201cto fill and forward his agenda to undermine the independence of the Federal Reserve\u2019\u201d.<\/p>\n
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Sign up to This Week in Trumpland<\/span><\/p>\n A deep dive into the policies, controversies and oddities surrounding the Trump administration<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n \u201cAllowing the president to remove members of the board over policy disagreements would also render illusory the board\u2019s independence,\u201d the lawsuit said. \u201cIn the few days following President Trump\u2019s unprecedented action, media, economists and academics from across the political spectrum have sounded the alarm that his actions threaten the historic independence of the Federal Reserve.\u201d<\/p>\n A representative for Cook\u2019s lawyers declined to comment on the lawsuit.<\/p>\n For months, Trump has publicly urged the Fed to cut interest rates, attacking the central bank \u2013 and its chair, Jerome Powell \u2013 over its refusal to do so. Policymakers have stressed the need to wait and see the impact of the administration\u2019s policies, such as tariffs and deportations, before approving a cut.<\/p>\n Cook\u2019s exit would allow Trump to tap a replacement, helping him exert more control over Fed policy. He suggested on Tuesday that he would \u201chave a majority\u201d on the Fed\u2019s seven-member board of governors \u201cvery shortly\u201d, adding: \u201cWe have to get the rates down a little bit.\u201d<\/p>\n The Trump administration has pursued several of the president\u2019s political enemies, including the New York attorney general, Letitia James, and the California senator Adam Schiff, over claims of mortgage fraud. Both James and Schiff have denied the allegations.<\/p>\n Cook is not a politician, but is among a string of senior Fed policymakers who have defied Trump\u2019s persistent calls for rate cuts. She became the first Black woman to sit on the central bank\u2019s board when she was appointed to a term that was not due to end until 2038.<\/p>\n A respected economist, with stints at Harvard University and Stanford University, Cook served on the council of economic advisers under Barack Obama.<\/p>\n","protected":false},"excerpt":{"rendered":" The Federal Reserve governor Lisa Cook has filed a lawsuit against Donald Trump over his \u201cunprecedented and illegal attempt\u201d to fire her, calling it an attempt to undermine the central bank\u2019s independence. The lawsuit \u2013 filed by Cook in federal court in Washington on Thursday \u2013 sets the stage for a legal battle over the<\/p>\n","protected":false},"author":1,"featured_media":18184,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[4310,7442,4437,319,77,7055,408,10089,517,1983,81],"class_list":{"0":"post-18183","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-attempt","9":"tag-cook","10":"tag-fed","11":"tag-federal","12":"tag-fire","13":"tag-governor","14":"tag-illegal","15":"tag-lisa","16":"tag-reserve","17":"tag-sues","18":"tag-trump"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/18183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18183"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/18183\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/18184"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}