Lisa Cook to remain on Fed board as Trump pushes for rate cuts

Fed board members news: But Cook is also in the middle of what is being called a historic legal fight. Her lawyer said a federal judge’s ruling this week that temporarily blocks Trump from removing Cook from the Fed board “vindicates” the independence of the central bank.

“The idea of allowing the president to fire Governor Cook without cause, based on vague and unsubstantiated allegations, would imperil the integrity of our financial system and the rule of law,” attorney Abbe Lowell said in a statement.

U.S. District Judge Jia Cobb in Washington ruled Sept. 9 that she would not yet rule on whether Trump can remove Cook, as he announced in August, for alleged mortgage fraud before she took her seat on the board. Cook has denied any wrongdoing and will remain in her position while the case moves forward. Cobb wrote that if Cook were removed from her position before the case was resolved, she would “immediately and irreparably suffer harm.”

The judge wrote that Congress specifically designed the Fed so the president can only remove a Fed governor “for cause,” which is defined as a legitimate reason related to their service.

“‘For cause’ does not mean removing a person for misconduct that occurred prior to his or her appointment,” Cobb wrote.

Trump refused to answer a reporter’s question regarding the case on Sept. 9. But no matter what the lower courts rule, most legal experts believe the Supreme Court will have the final say on whether a president has the power to remove a Federal Reserve independence, something no president has ever attempted.

The justices have allowed Trump to remove the heads of other independent boards, but the Supreme Court has also previously called the Fed’s seven-member board “uniquely structured,” as Congress “could not have been more emphatic in its desire to prevent the President from exerting influence” over monetary policy.

“The big question is whether the Supreme Court will allow Trump to ignore the ‘for cause’ removal protections that the court has said are critical for central banking,” Berman said. “This is a major escalation, and the stakes could not be higher for the Trump and Federal Reserve relations for the economy.”