Washington (AFP) – US Federal Reserve Governor Lisa Cook filed a lawsuit Thursday to challenge Donald Trump’s move to fire her from her position, as the president intensified pressure on the independent central bank.
“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would (be) the first of its kind in the Board’s history,” court documents said. Cook seeks a decision to confirm her status as a Fed governor, allowing her to continue in her responsibilities. In requesting “immediate declaratory and injunctive relief,” Cook also seeks an outcome safeguarding Fed officials’ congressionally mandated independence.
On Monday evening, Trump published a letter on his Truth Social platform stating that he had removed Cook from her role. He cited accusations of false statements on her mortgage agreements. The move marked a dramatic escalation in his effort to exert control over the Fed, in a step that could put the institution’s independence at risk, according to analysts.
Cook’s lawsuit stressed that Fed independence “is vital to its ability to make sound economic decisions, free from the political pressures of an election cycle.” On Wednesday, former Fed chief Janet Yellen, who also served as Treasury secretary under Trump’s predecessor Joe Biden, warned that the president’s move was a direct attempt to politicize the bank. Among the alleged false statements was that Cook had claimed two primary residences, one in Michigan and another in Georgia. Cook has not been charged with a crime and the alleged incidents occurred before she was in her current position.
For months, the US leader has been calling for the bank to slash interest rates, lashing out repeatedly at Fed Chair Jerome Powell for being “too late” and calling him a “moron.” But policymakers had been holding rates steady as they monitored the effects of Trump’s fresh — and sweeping — tariffs on consumer inflation. By removing Cook, Trump could potentially add another voice to the Fed’s board to try and shift interest rates in his favored direction.
A Fed spokesperson has earlier said that the central bank “will abide by any court decision.” The legal dispute marks the latest test of presidential powers under Trump’s new White House term, with the 79-year-old Republican — backed by loyalists throughout the government — forcefully moving to exert executive authority. But even as the Supreme Court’s conservative majority recently allowed Trump to fire members of other independent government boards, it created a carveout for the Fed in its ruling. Federal law says that Fed officials can only be removed for “cause,” which could be interpreted to mean malfeasance or dereliction of duty.
© 2024 AFP
