WASHINGTON — On Thursday, the Trump administration petitioned the Supreme Court for the authority to immediately dismiss Federal Reserve board member Lisa Cook.
In a court filing, Solicitor General D. John Sauer said that a judge’s ruling that blocked the firing constituted “improper judicial interference.”
President Donald Trump has made clear his intention to reshape the Federal Reserve despite its traditional independent status.
Trump has referred to a clause that permits the dismissal of Federal Reserve board members “for cause,” based on accusations of mortgage fraud against Cook made by Federal Housing Finance Agency Director Bill Pulte, one of Trump’s political appointees. Cook faces no criminal charges and has rejected the allegations.
Under the Federal Reserve Act, the only reason Fed governors can be removed is “for cause,” or some type of wrongdoing.
The White House has repeatedly maintained that Trump “lawfully removed Lisa Cook for cause.”
In the administration’s appeal to the Supreme Court, Sauer wrote: “The critical function of the Federal Reserve Board in the American economy amplifies the government’s and the public’s interest in ensuring that a member with ethical issues does not continue to exercise its extensive powers.”
Among the legal issues in the case is whether Cook has a due process right to contest the allegations before she can be removed from office.
Lower courts ruled in favor of Cook, prompting Trump to rush to the conservative-majority Supreme Court.
Trump is the first president in history to try removing a senior Fed official. Cook’s legal representatives argue that, if he is successful, this could destabilize global markets by disrupting the autonomy of what is regarded as the world’s most significant central bank.
Economists have widely agreed with that, and have warned that tampering with the Fed’s long-standing independence could cause interest rates to rise.
On Wednesday, the Federal Reserve lowered interest rates for the first time since December. Cook supported the rate reduction, something the president had long advocated for.
