Donald Trump posted a message claiming he fired economist Lisa Cook from the Federal Reserve Board of Governors. Federal law permits a president to remove a Fed governor only "for cause," and Trump alleges Cook made false statements on a mortgage application. Cook has not been charged with a crime and intends to sue to retain her seat. Legal arguments will focus on whether "for cause" requires job-related misconduct and whether personal-history investigations can justify removal. The dispute likely will reach the Supreme Court. A successful removal and replacement with a loyalist could shift control of the FOMC while Trump criticizes high interest rates.
Yesterday, Donald Trump posted a letter to Truth Social announcing that he had fired the economist Lisa Cook from her position as a member of the Federal Reserve Board of Governors. Whether this is true-whether Trump has, in fact, successfully fired Cook-is an unsettled question of enormous consequence. Under the law, a president can fire a Fed governor only "for cause." To clear that bar, Trump has accused Cook of having made false statements on a mortgage application.
Cook, who has not been charged with any crime, has promised to sue to keep her job. Her lawyers will likely argue, among other things, that the "for cause" standard requires proof that Cook has engaged in misconduct or poor performance related to her job as a Fed governor, and that it does not permit the president's lackeys to go digging through her personal history to gin up a pretext for termination. But because no president before Trump has crossed this particular line, the vague standard has never been litigated.
Ultimately, the Supreme Court will have to weigh in. Much more than Cook's employment status hinges on its decision. If Trump succeeds at firing her and replacing her with a loyalist, he could be just months away from a full-blown takeover of the Federal Reserve. Trump has not been coy about his interest in the makeup of the Fed. He complains that the central bank is hurting the U.S. economy (which, confusingly, he otherwise insists is better than ever) by keeping interest rates too high.
Collection
[
|
...
]