Donald Trump faces accusations of using unverified claims of mortgage fraud to challenge the independence of the Federal Reserve. Meanwhile, Lisa Cook, a governor at the Federal Reserve, is suing Trump over her removal from the board, which she contends was executed without proper notice or cause.
During a court hearing, Cook’s legal team argued that she was informed of her termination via a social media post rather than through official channels. US District Judge Jia Cobb is overseeing proceedings, which are expected to escalate to the Supreme Court. Cook is currently seeking a temporary restraining order against Trump’s attempt to dismiss her.
Cook’s attorney, Abbe Lowell, contended that Trump’s decision was influenced by claims of mortgage fraud made by Trump ally Bill Pulte. Pulte alleged that Cook had misrepresented her primary residence status to secure better mortgage terms. Lowell referred to this approach as the administration’s “weapon of choice” in attacking officials who contradict Trump regarding Federal Reserve policies.
The Justice Department’s attorney, Yaakov Roth, defended Trump’s authority to remove federal officials, asserting that there is no legal restriction preventing such actions. Cobb indicated that a decision in the case could be forthcoming as both parties present their arguments.
Recently, Trump issued a letter to Cook stating her immediate removal, based on the allegations from Pulte. The White House has claimed that Cook was credibly accused, but her legal team highlighted that these allegations remain unverified and have not been characterized as intentional wrongdoing.
The Federal Reserve is currently anticipated to resume interest rate cuts, though not to the extent that Trump has advocated. Cook’s term is set to last until 2038, and her removal could allow Trump to appoint a successor.
Source: https://www.theguardian.com/business/2025/aug/29/trump-administration-lisa-cook-federal-reserve