Federal Appeals Court Upholds Lisa Cook’s Position on the Federal Reserve Board
WASHINGTON – Late Monday, a federal appeals court dismissed the Trump administration’s bid to terminate Federal Reserve Board member Lisa Cook. This comes amid the president’s ongoing efforts to influence the Independent Committee to decrease interest rates.
The court ruled 2-1 in favor of Cook, allowing her to attend a Federal Reserve meeting scheduled for Tuesday, where a vote on potential interest rate adjustments will take place.
It’s anticipated that the Trump administration may take this matter to the Supreme Court.
Had Trump succeeded in removing Cook and appointing a replacement, he could have shifted the board’s majority, aligning it more closely with his goals of reducing interest rates to stimulate economic growth.
Cook’s Background
Cook, who was appointed by former President Joe Biden, holds the distinction of being the first Black woman to serve on the Fed. Since her appointment in 2022, she has consistently opposed lowering interest rates, and her current term extends until 2038.
In other developments, the U.S. Senate confirmed Trump’s nominee for a vacant position in the federal government, Stephen Milan, with a narrow vote of 48-47.
Despite the Federal Reserve’s independence, Milan will continue to lead the White House Economic Advisors Council.
In a recent social media post, Trump urged Federal Reserve Chairman Jerome Powell to act decisively, stating, “Now we have to cut interest rates greater than he had in mind. Housing will soar!!”
Split Court Decision
The Court of Appeals ruling regarding Cook saw a dissenting opinion from Judge Gregory G. Cassas, a Trump appointee, who disagreed with Judges J. Michelle Childs and Bradley N. Garcia, both appointed by Biden.
A federal judge had previously determined that Cook would remain in her role, citing a lack of evidence supporting the Trump administration’s claims of mortgage fraud, which didn’t meet the required threshold for removal under “just cause.”
Cassas supported the administration’s assertion that the president possesses the authority to remove Fed members for “just cause.” He noted that this broad interpretation provides the president with greater removal powers than what is typically dictated by Congress or reviewed by the Supreme Court.
On the other hand, Childs and Garcia did not engage with the “just cause” argument but emphasized that Cook’s due process rights were violated, making Trump’s efforts to dismiss her unlikely to succeed.
The majority opinion stated, “There is a high possibility that Cook’s due process claims are highly merit, so this emergency stance does not need to address the meaning of ’cause’ in the Federal Reserve Act.”
Trump officials previously referred Cook to the Justice Department, alleging she improperly submitted residency documents to obtain a more favorable mortgage rate. However, Reuters reported that no evidence supporting these claims was found.
