Federal Reserve Governor Lisa Cook has urged the U.S. Supreme Court to reject Donald Trump’s attempt to remove her from her position. Cook’s legal team argues that Trump’s unprecedented move would undermine the Federal Reserve’s independence and destabilise financial markets. The written response opposes the Justice Department’s request to lift a judge’s order blocking Trump from immediately removing Cook, who was appointed by former President Joe Biden. The Federal Reserve (also known as the Fed) is the central banking system of the United States. It was created by Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system.
Cook’s lawyers argue that granting Trump’s request would allow future presidents to manipulate monetary policy for political gain. They assert that Trump’s claims of mortgage fraud against Cook are insufficient grounds for removal under the 1913 law that established the Fed. A U.S. District Judge previously ruled that Trump’s claims were likely not sufficient for removal.
The legal battle has garnered attention from former Fed officials and Treasury secretaries, including Janet Yellen, Ben Bernanke, and Alan Greenspan, who have warned of the dangers of political interference in the Fed’s operations. They contend that allowing the president to remove Cook would threaten the Fed’s independence and erode public confidence. The group of former officials argued that such action would be seen as a threat to the Fed’s autonomy and could disrupt markets.
Trump has claimed that Cook falsified records to obtain favourable mortgage terms before joining the central bank in 2022. However, a loan estimate indicates she declared the property as a ‘vacation home,’ which seemingly contradicts the allegations. Cook’s lawyers maintain that the claims are a pretext to remove her due to her monetary policy stance. Cook participated in the Fed’s recent meeting where interest rates were cut, and she voted in favour of the cut.
