Federal Reserve Governor Lisa Cook is taking President Donald Trump to court in a bid to keep her job after the president abruptly fired her earlier this week. Cook filed suit Thursday in federal court in Washington, D.C., arguing that her dismissal is unlawful and violates the Fed’s independence.
At stake is not just her seat on the board, but also the broader question of how much power a president can wield over an institution long considered insulated from partisan politics. A hearing on her request for a temporary restraining order is set for Friday morning before Judge Jia Cobb, a Biden appointee.
Cook’s lawsuit contends that Trump’s move trampled her due process rights. She says she received no notice or hearing before being told she was out, despite the president citing “cause” for her removal. The allegation, raised by Federal Housing Finance Agency Director Bill Pulte, involves supposed mortgage fraud tied to two properties Cook owns. She has not been charged with any wrongdoing, and her lawyers say the claim was never investigated, much less proven.
The White House said Thursday that Cook had been “credibly accused” of lying on financial documents and that removing her would “improve the Fed’s credibility.” Trump also posted a letter to Cook on social media declaring that he had sufficient cause to fire her. The Justice Department has said it will look into Pulte’s allegations, but the investigation is in its earliest stages.
Cook’s attorney wrote in a complaint, “President Trump does not have the power to unilaterally redefine ‘cause,’” warning that unchecked presidential power could turn the Fed into just another political arm of the White House.
Legal experts say the case could prove pivotal. The Supreme Court has generally allowed Trump to remove the heads of independent agencies this year, but it has also suggested the Federal Reserve is different — a “uniquely structured” institution meant to buffer the economy from political turbulence.
For now, the Fed has said it will follow whatever the court decides. If Cook prevails, she will keep her vote heading into the board’s September meeting, where policymakers are expected to cut interest rates for the first time since December. If she loses, Trump will have an open seat to fill — and a tighter grip on the central bank.
