A lawyer for Lisa Cook on Friday urged a U.S. judge to let the Federal Reserve governor keep her job while she fights President Donald Trump’s attempt to fire her in a stunning assault on the central bank’s independence.
The case in the U.S. District Court in Washington D.C. could provide Trump with expansive power over the Fed, which has traditionally been shielded from political pressure as it makes tough, complicated decisions about whether to raise interest rates to fight inflation or lower them to encourage hiring and economic growth.
Trump has sought to fire Cook over allegations that she committed mortgage fraud when she purchased a home and condo in 2021, the year before President Joe Biden appointed her to the Fed’s governing board.
Trump has repeatedly criticized the Fed — and its chair, Jerome Powell — for refusing to cut interest rates. The central bank has left its benchmark rate unchanged this year, partly because it is waiting to see whether the big taxes — tariffs — that Trump is slapping on foreign products will push inflation higher. Cook has voted against a cut, along with most board members.
Arguments in the court Friday centered on what constitutes “cause,” which in this case are the unproven accusations of mortgage fraud.