As the nation’s first Black woman to govern on a Federal Reserve Board, Lisa Cook has recently come under fire from the Trump administration’s campaign to remove her. This action has immediate implications as the central bank prepares to face a pivotal vote on interest rates. The administration’s legal team recently submitted a response to the U.S. Court of Appeals for the District of Columbia, claiming that Cook’s arguments for retaining her position lack merit.
In June of 2021, Cook purchased a $1.5 million dollar home in Ann Arbor, Michigan and a $525,000 condominium in Atlanta. To boot, he mischaracterized the Atlanta condo on his loan estimate as a “vacation home.” This characterization directly contradicts the Trump administration’s narrative. They accuse her of having engaged in “severe mortgage fraud” by misrepresenting the nature of both properties as being “primary residences.” Bill Pulte, a fellow Trump appointee, has alleged that Cook forged signatures on forms claiming both residences were her main homes.
The administration has claimed that Cook’s legal claims are not sufficient to justify her continued presence on the board. In claiming that she ought to be fired they made a case for keeping the Federal Reserve honest.
“The public and the executive share an interest in ensuring the integrity of the Federal Reserve,” – Trump‘s lawyers
This is an important moment in history for the independent central bank. That would be the first time in 112 years that a sitting president has tried to fire a Fed governor. Attorneys for Cook, however, maintain that the administration has failed to provide credible justification for her firing. They point to the broader impact of this ruling.
In her defense, Cook has articulated the potential risks to both the economy and the country if a president could dismiss a Fed governor without justifiable cause. A short time later, a federal judge ruled Cook’s removal illegal. Consequently, her case received national attention and she was reappointed to the board.
The Federal Reserve prepares for an historic interest rate vote. Given that most economists expect only a quarter-point cut, Cook’s position would be determinative. Her dismissal would signal an alarming prioritization of political influence over economic policy and sound governance.
