WASHINGTON — Late Monday, an appeals court denied the Trump administration’s bid to remove Federal Reserve board member Lisa Cook, amid ongoing efforts to influence the independent board to reduce interest rates.
The 2-1 ruling permits Cook’s participation in Tuesday’s Federal Reserve meeting, where interest rate policies will be decided.
The Trump administration is expected to appeal this outcome to the Supreme Court.
Successfully ousting Cook would allow Trump to appoint a new member, potentially swaying the Fed towards his economic goals of lowering interest rates.
Trump nominee approved
Appointed by former President Joe Biden, Cook is the first Black woman on the Fed board and has consistently opposed rate cuts since 2022. Her term runs until 2038.
On Monday, the U.S. Senate narrowly confirmed Trump’s nominee, Stephen Miran, in a 48-47 vote for an open Fed position.
Despite the Fed’s independence, Miran will also lead the White House’s Council of Economic Advisers.
President Trump, via social media, urged Federal Reserve Chair Jerome Powell to “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND. HOUSING WILL SOAR!!!”
Appeals court splits
In the decision regarding Cook, D.C. Circuit Judge Gregory G. Katsas, a Trump appointee, dissented, while Biden appointees Judges J. Michelle Childs and Bradley N. Garcia ruled in favor of Cook.
Last week, a federal judge maintained Cook’s position, citing insufficient evidence from Trump’s claims of mortgage fraud, failing the “just cause” removal requirement.
Judge Katsas supported the administration’s stance on presidential authority for removal under “just cause.”
Judges Childs and Garcia bypassed the “just cause” issue, focusing instead on Cook’s lack of due process as grounds to block her removal.
“Because Cook’s due process claim is very likely meritorious, there is no need to address the meaning of ‘for cause’ in the Federal Reserve Act in this emergency posture,” they explained.
A Trump official referred Cook to the Department of Justice over allegations of misfiled residency paperwork for favorable mortgage rates. However, Reuters found no evidence of tax rule violations.
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