President Donald Trump‘s administration has filed an appeal asking the Supreme Court to allow him to move forward with firing Federal Reserve Gov. Lisa Cook over allegations of mortgage fraud.
The petition on Thursday came one day after Cook joined Fed Chair Jerome Powell in an 11-1 vote for a quarter-point cut to the federal funds rate, marking the central bank’s first rate reduction in nine months.
The lone dissent came from Trump appointee Stephen Miran, a White House economic adviser sworn in as a member of the Fed’s Board of Governors on Tuesday, who voted instead for a larger half-point rate cut.
Cook, a Biden appointee, has faced Trump’s wrath since August, when he first attempted to remove her from the Fed over allegations that she falsely claimed two separate homes as primary residences on mortgage applications made just weeks apart.
Cook sued to block the firing on the grounds that Trump lacked sufficient cause to remove her. On Monday, an appeals court upheld a district judge’s preliminary injunction blocking Cook’s removal as the case plays out.
Now, U.S. Solicitor General John Sauer has filed an emergency appeal asking the Supreme Court to swiftly strike down the district judge’s injunction and allow Trump to proceed with firing Cook.
“This application involves yet another case of improper judicial interference with the president’s removal authority—here, interference with the president’s authority to remove members of the Federal Reserve Board of Governors for cause,” Sauer wrote in the appeal.
Cook faces mortgage fraud allegations
Cook is one of the 12 policymakers on the Federal Open Market Committee who set the Fed’s interest rate, and the first Black woman to serve on the panel.
Nominated by former President Joe Biden for a full 14-year term, she was confirmed in 2022 in the Senate by a party-line 50-50 vote, with then-Vice President Kamala Harris casting the tiebreaker in her favor.
Trump first announced his intent to remove Cook after Trump-appointed housing regulator Bill Pulte took to social media to accuse Cook of lying on a mortgage application by listing two separate properties, purchased weeks apart, as her primary residence.
Pulte alleged that in summer 2021, Cook purchased a Michigan home and a condo in Atlanta within a few weeks of each other, and affirmed in mortgage documents for each property that it would be her primary residence for at least a year.
He further alleged that the Atlanta condo was listed as available for rent just two months after Cook purchased it, negating her claim on the mortgage application that it would be her primary residence.
Cook, who has not been criminally charged in the matter, in her lawsuit argued that allegations made on social media were not sufficient cause to remove her from the Board of Governors.
She also argued that Trump, by first announcing her firing on social media, did not allow her to respond to the claims, violating her constitutional right to due process.
In an order last week, DC District Judge Jia M. Cobb granted Cook’s request for a preliminary injunction blocking Powell or other Fed officials from carrying out Trump’s order to remove Cook as a Fed policymaker.
Cobb, in a memorandum, wrote that she finds Cook “substantially likely” to succeed in her argument that Trump violated the Federal Reserve Act, because her purported removal did not comply with the law’s requirement that Fed governors can only be removed “for cause.”
The White House has said that Pulte’s allegations against Cook constitute sufficient cause to remove her from office.
“The Federal Reserve Act’s broad ‘for cause’ provision rules out removal for no reason at all, or for policy disagreement,” Sauer wrote in Wednesday’s filing.
“But so long as the President identifies a cause, the determination of ‘some cause relating to the conduct, ability, fitness, or competence of the officer’ is within the President’s unreviewable discretion.”
Legal battle comes amid questions of Fed independence
If successful in firing Cook, Trump would be the first president to remove a Fed governor since the central bank was founded in 1913.
The legal battle over her ability to participate in setting the Fed’s benchmark interest rate follows an intense pressure campaign by Trump and his allies for the Fed to lower rates, which would juice the economy and lower government borrowing costs.
By law and tradition, the Fed has long been structured to remain free from political influence, and Powell has frequently reiterated that any interest rate decisions would be based purely on economic data, in line with the Fed’s dual mandate of maintaining stable prices and maximum employment.
However, Trump has appeared to chafe at Fed independence, publicly demanding much lower rates and, at various points, threatening to fire or sue Powell himself before attempting to fire Cook.
Trump’s appointment of Miran, the first White House official to ever sit on the Fed’s Board of Governors, raised further questions about an independent monetary policy.
Central bank independence is important because, historically, maintaining artificially low interest rates for political reasons often leads to runaway inflation and capital flight—trends that would ultimately drive government borrowing costs, as well as mortgage rates, higher.
“Lessons learned from both the U.S. experience and the experience of central banks around the globe suggest that monetary policy decisions are better and more credible when they are insulated from politics,” says Realtor.com® Chief Economist Danielle Hale.
