Fed Governor Lisa Cook Files Lawsuit Against Trump Over Unlawful Attempted Termination

TLDR

• Lisa Cook filed a lawsuit challenging Trump’s authority to remove her from the Fed.

• Cook seeks a temporary restraining order to block her removal pending legal review.

• The case raises questions about Federal Reserve independence from presidential control.

• Cook was appointed in 2022 and is the first Black woman to serve as Fed governor.

Federal Reserve Governor Lisa Cook filed a lawsuit on Thursday claiming President Donald Trump lacks the authority to remove her from office. The legal action responds to Trump’s announcement on August 25 that he would fire her, citing alleged mortgage fraud in 2021.

The lawsuit argues that federal law allows a president to remove a Fed governor only “for cause.” Cook’s lawyers said the allegations against her would not meet this standard. “Neither the type of ‘offense’ the President cited nor the threadbare evidence would constitute ’cause’ for removal,” the filing stated.

A motion for a temporary restraining order was also submitted, seeking to bar the Federal Reserve from taking steps to remove Cook until the litigation concludes. A hearing on this motion is scheduled for 10 a.m. EDT Friday.

Lisa Cook Legal Basis and Due Process Claims

Lisa Cook lawsuit argues that Trump violated her constitutional right to due process by attempting to remove her without notice or a hearing. The filing emphasized that the president does not have the authority to dismiss a Federal Reserve governor at will.

Cook’s lawyers highlighted that even serious allegations against her would not legally justify removal. “The President would not have ’cause’ to remove a Federal Reserve Governor even if he possessed smoking-gun evidence that she jaywalked in college,” the filing said.

The case has been assigned to U.S. District Judge Jia Cobb, a Biden appointee. Experts anticipate the case could reach the Supreme Court due to its potential effect on Fed independence and presidential powers.

Economic and Market Context

The dispute over Lisa Cook removal has drawn attention to the Federal Reserve’s independence. Markets reacted quickly to Trump’s announcement, with the U.S. dollar weakening against other major currencies.

Traders also adjusted expectations for upcoming interest rate decisions.

A Fed spokesperson said the central bank will comply with any court decision. Trump and the White House maintained that he exercised lawful authority, with spokesperson Kush Desai defending the attempted removal.

Cook’s Background and Preceding Events

Lisa Cook was appointed to the Federal Reserve in 2022 and is the first Black woman to serve as a governor. She acquired mortgages in Michigan and Georgia in 2021 while working as an academic, which Trump cited as the basis for his firing attempt.

Her financial transactions were publicly disclosed before her Senate confirmation, and experts questioned whether they could legally justify removal. Trump has previously made similar allegations of mortgage fraud against political opponents, including Senator Adam Schiff and New York Attorney General Letitia James, who denied wrongdoing.

Cook’s lawsuit and restraining order mark a rare legal challenge to a president’s attempt to dismiss a Federal Reserve official, emphasizing the bank’s unique status and autonomy in setting monetary policy.

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