Trump renews push to fire Cook before Fed meeting

What happened

The White House yesterday asked the U.S. Court of Appeals in Washington, D.C., to allow President Donald Trump to oust Federal Reserve Governor Lisa Cook before the Fed’s rate-setting policy meeting this week. A federal judge blocked Trump’s attempt last week, saying his unproven allegations that Cook committed mortgage fraud before joining the Fed were not sufficient cause to fire her. Newly unearthed documents also undermined Trump’s allegations.

Who said what

The push to remove Cook has “quickly become the defining battle in Trump’s effort to take control of the Fed,” which Congress crafted in the 1930s to “insulate presidentially appointed governors from political pressure,” The Wall Street Journal said. This is the “first time in the central bank’s 112-year history that a president has tried to fire a governor,” The Associated Press said.

Justice Department lawyers yesterday told the federal appeals court that Trump had “reasonable” cause to fire Cook and his decision was “an unreviewable exercise of the discretion Congress vested” in the president. Cook’s lawyers disagreed in a filing Saturday and argued that the “era of Fed independence would be over” if Trump could fire Fed governors on such “flimsy pretexts.”

Cook’s attorneys also pointed to a Reuters report, later confirmed by other major news organizations, that she listed her Atlanta condo as a “vacation home” and “second home” on two mortgage documents. Trump’s justification for firing her rests on allegations from his mortgage regulator Bill Pulte that she listed that condo and a Michigan house as “primary” residences, presumably to get lower interest rates. Her Atlanta mortgage was “higher than prevailing market rates at the time,” the Journal said. “This should be case closed on the Cook mortgage issue,” Georgetown Law professor Adam Levitin told The New York Times. “There is no way to maintain a criminal prosecution in light of the disclosure in Cook’s loan application.”

What next?

Trump’s lawyers asked the appellate court to lift the lower court’s pause on removing Cook by this evening, before the two-day Fed policy meeting kicks off tomorrow. The ruling, and an expected Senate vote today to confirm White House economic adviser Stephen Miran to fill a Fed vacancy, “likely won’t change the outcome of the meeting,” which is expected to end with a quarter-point rate cut, Reuters said.

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