A federal judge has issued a temporary injunction preventing President Donald Trump from dismissing Federal Reserve Governor Lisa Cook, who serves on the board responsible for setting U.S. interest rates. This legal decision represents a preliminary setback for the administration amid an unusual legal confrontation regarding the autonomy of the central bank.
In August, Trump publicly claimed he had terminated Cook, while the Federal Reserve maintains that she remains in her position. However, the ruling does not resolve the central question of whether the allegations made by Trump—asserting that Cook engaged in mortgage fraud prior to her appointment—are valid grounds for her dismissal. Cook has denied these allegations.
Cook’s attorney, Abbe David Lowell, emphasized the ruling’s significance in protecting the Federal Reserve’s independence from what he termed illegal political interference. He affirmed that Cook will continue to fulfill her responsibilities as a Senate-confirmed Board Governor.
Trump and William Pulte, the director of the Federal Housing and Finance Authority, have accused Cook of misrepresenting details about three properties on mortgage applications, possibly to acquire lower interest rates and tax benefits. In response, Cook has filed a lawsuit against Trump, seeking a judicial declaration that the president’s firing order is unlawful and void.
The legislation establishing the Federal Reserve states that governors can only be removed “for cause,” though it lacks a precise definition or procedure for such removals. This situation marks the first instance of a president attempting to fire a Fed governor, and the legal implications of this case may ultimately be determined by the Supreme Court. As the central bank prepares to meet next week, it is anticipated to announce significant interest rate decisions, the first cut since September 2024. Trump’s repeated criticisms of the Fed’s leadership have included calls for reductions in borrowing costs to stimulate the economy.
Source: https://www.bbc.com/news/articles/c740x28v8xno?at_medium=RSS&at_campaign=rss