US Court Prevents Trump from Removing Lisa Cook
An US appeals court has determined that President Donald Trump may not oust Federal Reserve governor Lisa Cook from her position.
The split decision on Monday represents a blow to Trump, as it ensures Cook can stay in office for the upcoming Fed policy meeting on Tuesday and Wednesday, where officials are expected to cut US interest rates.
Trump announced in August that he was dismissing Cook, alleging she had engaged in mortgage fraud. Cook rejected the claims and stated that the president had no authority to sack her.
This case has significant implications for the Fed's capacity to set interest rates free from interference from politicians.
Cook is part of the governing body responsible for setting interest rates in the United States.
When US lawmakers created the Fed in 1913, it included safeguards to preserve its autonomy from political pressure. No US leader has previously removed a Fed governor.
The statutes cited by Trump to support his attempt to fire Cook had not been challenged in court. The Trump team is expected to challenge Monday's decision to the Supreme Court.
Under the legislation that established the Fed, its governors may only be removed by a president for cause, though the law does not clarify the term nor establish procedures for removal.
Cook, a Biden appointee and the pioneering black woman to hold office as a Fed board member, sued Trump in August, claiming she was being targeted due to her economic stance.
The Fed has maintained interest rates so far this year as it works to manage price increases, which have been fueled in part by the impact of Trump's trade taxes on foreign products.
Trump has repeatedly demanded significant rate cuts and has berated Fed Chair Jerome Powell over his handling of monetary policy.
A rate cut is anticipated this week, though, in an effort to stimulate a sluggish US job market.
On Monday, Trump repeated his demand for a major interest rate cut, writing on his Truth Social platform that Fed Chair Jerome Powell "needs to cut interest rates, now, and bigger than he had in mind."
