The Supreme Court has agreed to take up the appeal on President Donald Trump’s attempt to remove Lisa Cook from the Federal Reserve Board of Governors and will hear oral arguments in January.
However, the Court has granted that pending their ruling, Cook can remain in her position at the Fed, denying Trump’s request she be removed immediately.
Trump attempted to fire Cook in August following allegations by Federal Housing Finance Agency (FHFA) Director Bill Pulte that she had committed mortgage fraud. Cook has denied the allegations and has filed a lawsuit against Trump for wrongful dismissal.
The President has the authority to remove Fed governors for “just cause,” but Cook and her legal counsel have maintained the circumstances do not meet that criteria. The specific allegations, that Cook supposedly misrepresented two properties as both a “primary home” to receive lower mortgage rates, have also been contradicted by other released documents wherein she referred to one property as a “second home.”
Lower courts have previously sided with Cook. In September, a D.C. District Court Judge placed an injunction preventing Cook’s removal from the Fed board, and then subsequently the Court of Appeals for the D.C. Circuit also blocked Trump from removing Cook. Trump appealed the case to the Supreme Court, where it will soon be decided.
Trump, who recently nominated his Economic Advisors Council Chairman Stephen Miran to the Fed board, has loudly called on the Fed to cut interest rates since taking office. His attempted firing of Cook has been criticized as an attempt to exert further control over monetary policy and the Fed, which maintains independence from the executive branch in its decision-making.
As Cook can remain in her position for the time being, she will barring unforeseen circumstances be attending the two remaining Federal Open Market Committee (FOMC) meetings this year, on October 28 – 29 and then December 9 – 10.
The FOMC is where the Fed determines monetary policy; at their September meeting, they voted to cut interest rates by 25 basis points in response to a poor labor market, despite inflation also rising. It remains to be seen which will be the deciding factor at their next vote, though Fed Board member Michelle Bowman has recently stated publicly the labor market demands greater attention.
