The request comes after a federal court blocked Lisa Cook’s firing earlier this week, and her lawsuit challenged her firing to move forward.
President Donald Trump’s administration has called on the Court of Appeal to remove Lisa Cook from the Federal Reserve Board by Monday before the next vote on the central bank’s next interest rate.
Thursday’s request represents an extraordinary effort by the White House to shape the board before the Fed’s interest rate setting committee meets next Tuesday and Wednesday.
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At the same time, Senate Republicans are pushing to confirm that Trump candidate Stephen Milan is a candidate for the Federal Reserve board’s open spot that could happen soon Monday.
In a court filing Thursday, the Justice Department asked the U.S. District Jia Cobb on Tuesday to suspend the decision of US District Judge Jia Cobb’s decision on Tuesday for a US District Judge who temporarily blocked the removal of Cooks after the administration’s appeal was put on hold.
Trump moved to a fire in late August. Deniing fraud, Cook filed a lawsuit claiming that he did not give him legal authority to remove Trump’s claim that he engaged in mortgage fraud before he joined the central bank, and was an excuse to fire her for her financial policy stance.
Cobb’s ruling prevents the Fed from following Cook’s firing, but her case moves forward.
On an emergency appeal, Trump’s lawyers argued that her suspected actions, even before her time as governor, “will question whether Cook’s credibility could be an responsible steward of interest rates and the economy.”
The administration has asked the Court of Appeals to issue an emergency decision that overturns the lower court by Monday. If their appeal is successful, Cook will be removed from the Fed’s board until her case is finally settled in court, and she will miss a meeting next week.
If the Court of Appeals upholds Cook, the administration can seek an emergency ruling from the Supreme Court.
The case, which is likely to end before the U.S. Supreme Court, has affected the Fed’s ability to set interest rates regardless of politicians’ wishes, and is widely considered important to the central bank’s ability to manage inflation.
The Supreme Court and lower courts of appeals, including the DC Circuit, have temporarily lifted several other rulings that temporarily blocked Trump from firing officials from agencies that were historically independent from the White House.
However, on Wednesday, the DC Circuit blocked Trump from firing U.S. copyright office director, Silla Permater.
Trump has called for the Fed to repeatedly veer and aggressively cut Fed Chairman Jerome Powell for stewardship over monetary policy. Since its launch in 2022, Cook has voted on all of the Fed’s decisions, including both interest rate hikes and interest rate cuts.
Fed’s independence
The legislation that created the Fed says that the governor could only be removed “for the cause,” but does not define the terminology or establish procedures for removal. No president has deleted the Fed governor. The law has never been tested in court.
Cobb on Tuesday said public interest in Fed independence from political coercion is in support of maintaining cooks with the Fed while the lawsuit continues.
She said the best read of the law is that the Fed governor could only be removed for fraud while in office. All mortgage fraud claims against Cook are related to actions taken in 2022 prior to confirmation by the US Senate.
Trump and William Porto, directors of federal housing finance agencies appointed by the president, say Cook inaccurately described three separate properties related to mortgage applications.
The Justice Department also launched a criminal mortgage fraud investigation to Cook and issued large ju judge subpoenas from both Georgia and Michigan.
