Trump wants to get rid of Cook before the interest rate decision

The administration of US PresidentDonald Trump (79) asked a federal appeals court on Thursday to allow the removal of Lisa Cook (61), the governor of the US Federal Reserve.

At the end of August, Trump had already attempted to oust Cook from office, but U.S. District Judge Jia Cobb (45) had blocked this . Now the Department of Justice has intervened and asked the D.C. Circuit Court of Appeals to stay Cobb's order. The department urged the court to rule quickly so that the president can remove Cook before the Fed's monetary policy meeting on September 16 and 17. This would "strengthen, not weaken, the integrity of the Federal Reserve ." The Fed is widely expected to cut interest rates at the meeting.

Cook's lawyers argue that a dismissal could disrupt the monetary policy meeting and fear it could trigger market turmoil. "This has the real potential to impact domestic and foreign markets," they wrote in a brief Thursday evening.

Experts see the Fed's political independence at risk. It is widely considered crucial for inflation control that the central bank sets its interest rates independently of political desires. Cook's lawyers stated that they wanted to "prevent the president from seizing control of this nation's independent central bank."

Trump justified Cook's dismissal by arguing that there were reasonable grounds to believe Cook had made false statements in one or more mortgage contracts. Cook then announced through her lawyers that she would take legal action. She argued that the president had no right to dismiss her.

Cook denied the allegations, saying that even if she had unknowingly made false statements, she did so years before taking office when she took out a private mortgage.

Judge Cobb's reasoning stated, among other things, that the president may only remove a member of the Fed's Board of Governors "for just cause." Thus, someone cannot be removed solely for conduct that occurred before taking office. She also wrote that the public interest in the Fed's independence supports Cook's reinstatement.

The case could end up before the Supreme Court. The Supreme Court and other appeals courts have overturned several similar rulings in the past.

This isn't the first time Trump has attempted to fire officials from traditionally independent agencies. For example, he wanted to fire Shira Perlmutter (69), director of the U.S. Copyright Office. The DC Circuit recently blocked this move. However, no president has ever fired a Fed governor before.

Trump is demanding that the Fed immediately and massively cut interest rates and has recently sharply criticized Fed Chairman Jerome Powell (72). Since taking office in 2022, Cook has voted with the Fed's majority on all interest rate decisions—both increases and cuts.