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Fed governor Cook to seek court order blocking her firing by Trump
Federal Reserve Board of Governors member Lisa Cook listens during an open meeting of the Board of Governors at the Federal Reserve, June 25, 2025, in Washington. (AP Photo/Mark Schiefelbein, File)2025-08-29T10:00:07Z A case that could provide the Trump administration with new and expansive power over the traditionally independent Federal Reserve will get its first court hearing Friday. Federal Reserve Governor Lisa Cook has requested an emergency injunction to block President Donald Trumps attempt to fire her over allegations that she committed mortgage fraud when she purchased a home and condo in 2021. She was appointed to the Feds board by former president Joe Biden in 2022. If her firing is allowed to stand, it would likely erode the Feds longstanding independence from day-to-day politics. No president has ever fired a Fed governor in the agencys 112-year history. Economists broadly support Fed independence because it makes it easier for the central bank to take unpopular steps such as raising interest rates to combat inflation. Cook has asked the court to issue an emergency order that would block Trumps firing of her and enable her to remain on the seven-member board of governors while her lawsuit seeking to overturn the firing makes its way through the courts. Many observers expect her case will end up at the U.S. Supreme Court. The law governing the Fed says the president cant fire a governor just because they disagree over interest rate policy. Trump has repeatedly demanded that the Fed, led by Chair Jerome Powell, reduce its key interest rate, which is currently 4.3%. Yet the Fed has kept it unchanged for the last five meetings. But the president may be able to fire a Fed governor for cause, which has traditionally been interpreted to mean inefficiency, neglect of duty, or malfeasance. Cooks lawyers argue that it also refers only to conduct while in office. They also say that she was entitled to a hearing and an opportunity to rebut the charges. The unsubstantiated and unproven allegation that Governor Cook potentially erred in filling out a mortgage form prior to her Senate confirmation does not amount to cause, the lawsuit says. Trump has moved to fire a number of leaders from a host of independent federal regulatory agencies, including at the National Transportation Safety Board, Surface Transportation Board, Equal Employment Opportunity Commission, and Nuclear Regulatory Commission, as well as the Fed.The Supreme Court declined to temporarily block the president from firing directors of some independent agencies earlier this year while those cases move through the courts. Legal experts say the high court this year has shown more deference to the presidents removal powers than it has in the past. Still, in a case in May, the Supreme Court appeared to single out the Fed as deserving of greater independence than other agencies, describing it as a uniquely structured, quasi-private entity. As a result, its harder to gauge how the Supreme Court could rule if this case lands in its lap.As a governor, Cook votes on all the Feds interest rate decisions and helps oversee bank regulation. The Fed has substantial power over the economy by raising or cutting its key interest rate, which can then influence a broad range of other borrowing costs, including mortgages, car loans, and business loans. Bill Pulte, Trumps appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, first leveled the accusation against Cook that she has committed mortgage fraud. Its a charge he has also made against two of Trumps biggest political enemies, California Democratic Sen. Adam Schiff and New York Attorney General Letitia James, who has prosecuted Trump. Pulte has ignored a similar case involving Ken Paxton, the Texas attorney general who is friendly with Trump and is running for Senate in his states Republican primary. Cooks lawsuit responds by arguing that the claims are just a pretext in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve.If Trump can replace Cook, he may be able to gain a 4-3 majority on the Feds governing board. Trump appointed two board members during his first term and has nominated a key White House economic adviser, Stephen Miran, to replace Adriana Kugler, another Fed governor who stepped down unexpectedly Aug. 1. Trump has said he will only appoint people to the Fed who will support lower rates. CHRISTOPHER RUGABER Rugaber has covered the Federal Reserve and the U.S. economy for the AP for 16 years. He is a two-time finalist for the Gerald Loeb award for business reporting. twitter mailto
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