Appeals court halts removal of Lisa Cook from Fed amid fraud allegations
The case, considered unprecedented, could reach the Supreme Court and set a precedent on the limits of presidential power.
Lisa Cook taking the oath of office
A federal appeals court in Washington, DC, rejected Monday night an emergency request by the Trump administration to remove Lisa Cook from the Federal Reserve Board. The decision, by a divided three-judge panel, keeps in place a lower court order that had blocked the dismissal while the legal process moves forward.
The ruling comes on the eve of the Fed's next monetary policy meeting, scheduled for Sept. 16-17, and represents a new chapter in the tension between the White House and the central bank.
Politics
Justice Department opens investigation into Lisa Cook for alleged fraud in mortgage documents
Sabrina Martin
Accusations and defense
Trump announced last month his decision to remove Cook, following allegations of mortgage fraud spread by Bill Pulte, director of the Federal Housing Finance Agency. The Justice Department opened an investigation, though Cook faces no charges.
In her defense, the Fed governor's lawyers argue that she was never given a chance to respond to the allegations and that the chairman's real purpose is to open space on the board to push for interest rate cuts.
Legal debate
The Justice Department, by contrast, argues that the chairman has broad discretion to define that justification, even if the events occurred before he took office.
Next Steps
The case, considered unprecedented, could reach the Supreme Court and set a precedent on the limits of presidential power vis-à-vis an institution designed to operate with political independence.
Cook, nominated by Joe Biden and serving until 2038, will remain in her post as long as the litigation continues.
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