Trump administration renews push to fire Fed governor Lisa Cook ahead of key vote

Key Points

• The Trump administration has renewed its efforts to fire Lisa Cook from the Federal Reserve ahead of a crucial interest rate vote, marking a significant intervention in the Fed's independence.
• Cooks' legal team argues that the administration lacks sufficient cause for her dismissal, emphasizing potential risks to the economy if such an action is allowed.
• This situation is unprecedented as it would be the first time a president has attempted to remove a Federal Reserve governor in the institution's 112-year history.
• Cook was reinstated by a federal judge, but the Trump administration is appealing the decision, seeking a ruling before the Fed's upcoming meeting.

President Donald Trump’s administration renewed its request Sunday for a federal appeals court to let him fire Lisa Cook from the Federal Reserve’s board of governors, a move the president is seeking ahead of the central bank’s vote on interest rates.

The Trump administration filed a response just ahead of a 3 p.m. Eastern deadline Sunday to the U.S. Court of Appeals for the District of Columbia, arguing that Cook’s legal arguments for why she should stay on the job were meritless. Lawyers for Cook argued in a Saturday filing that the Trump administration has not shown sufficient cause to fire her, and stressed the risks to the economy and country if the president were allowed to fire a Fed governor without proper cause.

Sunday’s filing is the latest step in an unprecedented effort by the White House to shape the historically independent Fed. Cook’s firing marks the first time in the central bank’s 112-year history that a president has tried to fire a governor.

“The public and the executive share an interest in ensuring the integrity of the Federal Reserve,” Trump’s lawyers argued in Sunday’s filing. “And that requires respecting the president’s statutory authority to remove governors ‘for cause’ when such cause arises.”

Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, has accused Cook of signing separate documents in which she allegedly said that both the Atlanta property and a home in Ann Arbor, Michigan, also purchased in June 2021, were both “primary residences.” Pulte submitted a criminal referral to the Justice Department, which has opened an investigation.

Trump relied on those allegations to fire Cook “for cause.”

Cook, the first Black woman to serve as a Fed governor, referred to the condominium as a “vacation home” in a loan estimate, a characterization that could undermine claims by the Trump administration that she committed mortgage fraud. Documents obtained by The Associated Press also showed that on a second form submitted by Cook to gain a security clearance, she described the property as a “second home.”

Cook sued the Trump administration to block her firing and a federal judge ruled Tuesday that the removal was illegal and reinstated her to the Fed’s board.

The administration appealed and asked for an emergency ruling just before the Fed is set to meet this week and decide whether to reduce its key interest rate. Most economists expect they will cut the rate by a quarter point.