Donald Trump just had a nominee for the Federal Reserve board clear a huge hurdle, and it appeared as though the president might actually get his way and secure an interest rate drop at long last.
That, however, may now be in jeopardy after an appellate court dealt Trump another loss in the courtroom.
Federal Reserve Governor Lisa Cook has been allowed to remain in her position ahead of a key meeting of the board on which she serves.
Even though it is the president who appoints the board of the Fed, it is supposed to be an independent agency.
Trump tested the waters this year by firing Cook after a criminal referral for mortgage fraud was made.
Now, I stated at the time that I believed Trump jumped the gun here, as I think, at the very least, a grand jury indictment would be needed to back that play.
Cook immediately challenged her dismissal.
Cook hired Abbe Lowell, Hunter Biden’s former attorney, to represent her in fighting the firing.
Her complaint stated, "It is clear from the circumstances surrounding Governor Cook's purported removal from the Federal Reserve Board that the mortgage allegations against her are pretextual, in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve.”
The suit further stated, "This case challenges President Trump's unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would be the first of its kind in the Board's history."
Lowell continued, "It would subvert the Federal Reserve Act ... which explicitly requires a showing of 'cause' for a Governor's removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not.”
The primary issue here is that Trump must demonstrate cause, and a mere criminal referral to the DOJ is unlikely to satisfy the court on this front (as I noted, a grand jury indictment would carry significantly more weight).
As we anticipated, an appeals court just ruled that Cook is to remain on the board for the time being, stating, “Granting the government’s request for emergency relief would thus upend, not preserve, the status quo.”
The ruling continued, “A stay would itself introduce the possibility of ‘the disruptive effect of the repeated removal and reinstatement’ of Cook during this litigation.”
This is not just a court loss for Trump, but it may serve as a crushing blow to his agenda, as Trump continues his push to have interest rates lowered. After this incident, I think it is likely a safe bet that Cook is a firm “no” vote on anything Trump wants done by the Fed.
