US Federal Reserve Chair Lisa Cook plans to sue the Donald Trump administration to prevent efforts to oust her, her legal representative said.
“President Trump does not have the authority to remove Fed Chair Lisa Cook,” said Abby Lowell, a prominent Washington attorney who has worked with both major political parties.
His actions to terminate her powers, based only on a recommendation document, lack factual and legal justification. We intend to challenge these illegal measures through the courts.
Trump's extraordinary attempt to remove Cook is likely to end up in the Supreme Court and could clarify the boundaries of the president's authority over the traditionally autonomous body.
The Fed has significant leverage over the nation's economy by controlling short-term interest rates, which affect the cost of borrowing, including mortgages, auto loans, and business financing.
The Federal Reserve commented on the situation for the first time on Tuesday, saying it was prepared to “comply with all court orders.”
However, the Fed's statement did not specify whether Cook would remain in his position during the trial, nor did it directly assess Trump's actions.
Republican Trump has repeatedly called on Chairman Jerome Powell and the Fed's rate-setting committee to cut interest rates to stimulate the economy and reduce payments on the nation's more than $37 trillion debt.
Successfully removing Cook from the Fed's board could threaten the institutional independence the Fed needs to effectively combat inflation through unpopular measures like rate hikes.
Weakening the Fed's autonomy could lead to higher interest rates for households, as investors demand higher yields on government bonds to offset inflation risks, increasing the cost of borrowing in the economy.
– Claims to Cook
Bill Pulte, Trump's appointee to oversee mortgage lenders Fannie Mae and Freddie Mac, was indicted last week.
Cook listed two primary addresses in 2021 — Ann Arbor, Michigan, and Atlanta — to qualify for favorable mortgage terms, Pulte said.
Interest rates on loans for second homes or investment properties are usually higher.
Cook's next logical step would be to seek a court injunction blocking Trump's order and allowing her to remain as Fed governor.
In a statement released Monday evening, Cook confirmed her decision not to leave her post.
“President Trump has announced my termination for 'cause', even though there is no legal basis or authority to do so,” she said in an email. “I have no intention of resigning.”
Sourse: breakingnews.ie
