Who is Federal Reserve Governor Lisa Cook?
Federal Reserve Governor Lisa Cook, who was reappointed until 2038, refuses to argue that Trump fired her.
WASHINGTON – The Supreme Court has rejected his bid to fire her immediately from the central bank, which has broadly impacted the economy through interest rate decisions, saying President Donald Trump must allow Lisa Cook to remain in the Federal Reserve for now.
The High Court said it would hear verbal debate on the January issue, not Trump’s urgent request for her to be fired.
The judiciary is already considering a similar case with the Federal Trade Commission. This raises the question of whether Congress or the court can protect independent leaders from presidential removal.
The FTC case is scheduled to be discussed in December.
In the Federal Reserve dispute, Trump asked the High Court on September 18 to suspend a federal judge’s ruling that prevented Cook, the first black woman appointed by his Democratic predecessor, from firing him from filing Cook, the first black woman to serve as Fed governor.
The judge has been criticized for making such a massive decision quickly without a full briefing involving oral discussion.
Cook’s lawyer previously said the High Court would eliminate her and endanger “a financial market shock wave that cannot be easily revoked.”
Presidential forces’ Trump test restrictions
Trump is examining the limits of his enforcement, including over-institutions designed to be insulated from political influence.
In May, the Supreme Court said Trump could fire without reason on members of two such agencies that address labor issues.
However, most also state that the Federal Reserve is different from the National Labor Relations Commission and the Merit System Protection Commission.
The courts are likely to call the central bank “uniquely structured, semi-private entities” and support the constitutionality of the provisions that prevent judicialists from being removed without reason.
But Trump argues that he has ample legitimacy. Trump said he fired Cook in August, where he allegedly made false statements about his mortgage application before beginning his 14-year term in 2023.
Cook says Trump’s real beef is a policy debate
Cook has not been charged with a crime and has not had the opportunity to formally respond to Trump’s claim that she declared multiple homes as “major residences” in order to earn a more favorable interest rate in her second home.
The documents reviewed by Reutershow declared a “home of vacation” and a second property against other documents cited by Cook’s critics.
The law allows Fed members to be removed “for a cause,” but does not elaborate on what qualifies or designates the cause of a procedure to prove that someone has committed a disqualification.
Cook argues Trump’s allegations are an excuse to fire her because of her stance on monetary policy.
“The president insisted on removing the governor only after repeatedly criticizing her and her colleagues for not making a monetary policy choice that prioritized short-term growth over long-term stability,” her lawyer told the Supreme Court.
Congress set its supply to be independent of political pressure
The Fed sets interest rates that help determine the pace at which the economy grows. Trump made Federal Reserve Chairman Jerome Powell because lowering interest rates can’t spur growth.
Although the president often roared with criticism during his second term, Congress established the Fed’s board of directors in 1913 with seven members, making economic decisions independent of political pressure.
Cook’s lawyers have focused on the tradition of independence in their discussions.
“An order allowing Governor Cook to be removed from this court will therefore threaten serious harm to the American economy,” her lawyer told the Supreme Court in a September 25 filing.
Trump says court reviews are limited
The Justice Department argued in a September 18 filing that the “for a cause” provisions of the Federal Reserve Act were broad and ruled out members being fired for no reason or someone being fired based on policy disagreements.
And as long as the president has other justifications, the reasons cannot be reviewed by the court, Attorney General John Sauer told the Supreme Court in a September 18 filing.
“The Federal Reserve plays a unique and important role in the American economy,” Sauer wrote.
Sauer also said that Cook had no right to get an opportunity for a formal response, and in any case, when Trump first raised them, she refused to counter the allegations.
“Because he refused to attract the president’s attention or challenge important facts, Cook cannot complain that the process is insufficient,” he writes.
Cook’s lawyer said she has the right to formally inform the president about why she wants to remove her and must give her a hearing through a process that the court can review.
“The bottom line is this. There must be some meaningful check on the president’s ability to eliminate Governor Cook, contrary to the infinite claims of the president’s authority,” they wrote.
