The Trump administration has asked an appeals court to remove Lisa Cook from the Federal Reserve’s board of governors by Monday, before the central bank’s next vote on interest rates.
Trump sought to fire Cook Aug. 25, but a federal judge ruled late Tuesday that the removal was illegal and reinstated her to the Fed’s board. Trump has accused Cook of mortgage fraud because she appeared to claim two properties as “primary residences” in July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home. Cook has denied the charges.
On Tuesday, U.S. District Court Judge Jia Cobb ruled that the administration had not satisfied a requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook did not join the Fed’s board until 2022.
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In their emergency appeal, Trump’s lawyers argued that even if the conduct occurred before her time as governor, her alleged actions “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”
They asked an appeals court to issue an emergency decision reversing the lower court by Monday. The Fed begins its next meeting Tuesday, and will announce a decision on interest rates on Wednesday. The central bank is almost certain to reduce its benchmark rate at that meeting by a quarter-point, to about 4.1%.
