A federal judge Friday said she would set an expedited briefing schedule for Federal Reserve Governor Lisa Cook’s challenge to President Donald Trump’s attempted firing of her earlier in the week.
Cook is aiming to keep her position until her term expires in 2038, arguing that Trump’s attempt to remove her has no legal basis.
U.S. District of Columbia Judge Jia M. Cobb, whom former President Joe Biden appointed in 2021, gave Lisa Cook until Tuesday to respond to the government’s brief that seeks to justify her removal.
The deadline is part of a fast-tracked briefing process for the case that could test the ability of the Federal Reserve Board to operate independently. If Cook is removed, Trump would select another member of the seven-person panel, likely meaning a majority of the board would align with the president.
The legal challenge is likely to head to the Supreme Court.
Cook filed a suit against the president Thursday after he posted to social media Monday that he would fire her over allegations she submitted improper paperwork in order to obtain a favorable mortgage on a second home. She has not been charged with a crime.
An attorney for Cook, Abbe David Lowell, argued Friday that the allegations against Cook – that she engaged in mortgage fraud – did not qualify as “just cause” for removal.
Trump has argued that under the Federal Reserve Act, he has the authority to dismiss a governor for “just cause,” which is typically defined as gross misconduct, but Lowell argued Trump was simply seeking to install a governor more aligned with his policy views.
“Cause for the president means she won’t go along with the interest-rate drop,” Lowell said during Friday’s hearing.
For months Trump has pressured the Fed to lower interest rates. Cook, the first Black woman appointed to the board, has consistently voted with Federal Reserve Chair Jerome H. Powell to not lower rates.
Justice Department attorney Yaakov Roth, who is representing the administration, argued the statute defined just cause with open-ended language that gave the president broad discretion to fire a Fed member.
Bill Pulte, the director of the Federal Housing Finance Agency, made the accusations of mortgage fraud. He referred Cook’s mortgage application to the Department of Justice for criminal prosecution.
In court filings, the Fed did not take a position but pushed for a quick ruling in order “to remove the existing cloud of uncertainty.”
This article was first published on News From the States and republished here under a Creative Commons License.
