WASHINGTON – On Thursday, President Trump’s Justice Department asked the Supreme Court for permission to remove Federal Reserve Governor Lisa Cook, following two lower court rulings that prevented such action.
Attorney General D. John Sauer claimed that the decisions made by the lower courts to keep Cook in her position represented “inappropriate judicial interference” and urged the Supreme Court to reverse those decisions.
In the filing, Sauer mentioned, “This application highlights another instance of inappropriate judicial interference with the President’s removal power.” He also argued that Cook does not hold the benefits granted by the Fifth Amendment, which plays a role in her status as a Federal Reserve governor.
He added that the President is particularly concerned about potential mortgage fraud linked to those setting interest rates that impact American mortgages.
Trump had attempted to fire Cook on August 25 after accusations surfaced from Federal Housing Finance Director Bill Prute regarding potential fraud related to her mortgage application.
According to the Federal Reserve Act, governors can be dismissed for “cause.”
Cook, who hasn’t been charged with any crime, subsequently filed a lawsuit against the administration, arguing that the claims made against her did not qualify as adequate cause for termination.
A federal judge recently issued a temporary block on her dismissal while the lawsuit is ongoing.
The appeals court in D.C. confirmed the lower court’s decision, prompting Sauer’s appeal to the Supreme Court.
On Wednesday, Cook participated in a decision that saw the Fed lower its benchmark interest rate target by 25 basis points, marking the first cut since December.
She was among the governors in favor of the rate decrease, amidst signs of a weakening labor market. Stephen Miran, another appointee by Trump, was the sole dissenting vote, advocating for a 50 basis point reduction.
Federal Reserve Chairman Jerome Powell defended the Fed’s stance on interest rates, indicating that uncertainty about inflationary impacts from Trump’s tariffs has contributed to a stabilization of rates.
For months, Trump has been pushing for lower interest rates as his administration seeks to refinance a significant amount of national debt. His attempt to dismiss Cook has been perceived as a move to reshape the central bank.
