Fed Governor Lisa Cook sued Donald Trump in an attempt to fire her, launching a potential legal battle against the autonomy of the U.S. central bank.
Cook has asked the court to declare Trump’s dismissal order “illegal and invalid” and has been appointed Fed chairman Jerome Powell and the board of directors as defendants.
Trump said there was “full reason” to believe Cook made false statements on the mortgage and cited constitutional powers, which he said allowed him to remove him.
The president has put increasing pressure on the Fed as he believes he is reluctant to lower interest rates. Cook is part of the board of directors responsible for setting interest rates in the United States.
Thursday’s lawsuit could raise many legal challenges that could be encountered in the U.S. Supreme Court.
“The case challenged President Trump’s unprecedented illegal attempt to remove Governor Cook from her position, which would be the first in board history if allowed to happen,” Cook’s attorney Abbe Lowell wrote in the lawsuit.
“This will overturn the Fed Act … explicitly demanding the ‘reason’ of dismissal to the governor, an unconfirmed allegation of Governor Cook’s private mortgage application filed before the Senate confirmation,” Lowell wrote.
White House spokesman Kush Desai told the BBC president “exercised his legal power to remove” Cook.
“The president determined that there was reason to dismiss the state was reliably accused of lying on financial institutions from a highly sensitive position in financial documents,” he said. “In order to dismiss, the removal improved the Fed’s responsibility and credibility to the market and the American people.”
The Fed Act does not give the president the authority to remove Fed officials, but as Trump says, it does allow him to do so “for his career.”
The allegations against Cook are first in an open letter from housing finance regulators, Trump ally Bill Pulte. In the letter, he accused Cook of forging records to obtain a mortgage.
The letter claimed she signed two documents for two weeks, proving that both homes in different states were her primary residence. No charges have been filed against Cook, and it is unclear whether she is investigating the allegations.
Cook’s lawsuit did not resolve the allegations.
She previously denied that there was anything reason to fire her, and legal experts showed suspicion in Trump’s position.
She is one of seven members of the Fed’s board of directors, in this position a 12-person committee that sets interest rates in the U.S.
Since returning to Washington, Trump has put more and more pressure on the Fed, especially Powell.
The U.S. president nominates candidates for the position, so canceling Cook will mean she can be replaced by someone who is more conducive to lowering interest rates and Trump’s economic agenda.
The Fed’s decision will affect the interest rate at which Americans can borrow money and the savings rate on their bank accounts. Central banks that formulate monetary policies in other countries are also paying close attention to U.S. interest rates.
Cook votes with Powell and most other members of the committee to maintain Fed’s interest rate Last meeting set At the end of July.






