The Trump administration asked the Supreme Court on Thursday to block Federal Reserve Governor Lisa Cook’s reinstatement to the board.
A federal appeals court declined Monday to block an order by District Court Judge Jia Cobb, a Biden appointee, keeping Cook on the board after she was fired over mortgage fraud allegations.
“That the Federal Reserve Board plays a uniquely important role in the American economy only heightens the government’s and the public’s interest in ensuring that an ethically compromised member does not continue wielding its vast powers,” the administration’s petition states. “Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself and refuses to explain the apparent misrepresentations.”
President Donald Trump fired Cook in August over allegations of mortgage fraud brought by Federal Housing Finance Agency (FHFA) director Bill Pulte. Pulte’s referral prompted the Department of Justice (DOJ) to launch an investigation into Cook.
Cook sued to challenge her removal Aug. 28, calling it “unprecedented and illegal.”
The president’s decision is not “subject to judicial review” because he is allowed to remove officers “for cause,” Solicitor General John Sauer argues in the application.
“This Court has left open whether an exception to the removal power, grounded in history and tradition, allows Congress to restrict the President’s power to remove members of the Federal Reserve Board,” Sauer continues. “But no such historical exception could authorize judicial review of the President’s finding of cause, since courts have traditionally treated such findings as unreviewable.”
The Federal Reserve announced a quarter-point interest rate cut on Wednesday, marking the first cut this year. Trump has repeatedly called on Federal Reserve Chair Jerome Powell to lower the rate.
This is a breaking news story and will be updated.
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