Fed Governor Cook to sue over Trump's decision to fire her

WASHINGTON - US Federal Reserve Governor Lisa Cook will file a lawsuit to prevent President Donald Trump from firing her, her lawyer said Tuesday, arguing the president has no authority to remove Cook.

"His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis," the lawyer, Abbe Lowell, said in a statement. "We will be filing a lawsuit challenging this illegal action."

Trump said in a letter posted on Truth Social on Monday night that Cook's firing was "effective immediately" for alleged "deceitful and potential criminal conduct in a financial matter".

Trump cited a criminal referral letter from Federal Housing Finance Agency Director Bill Pulte, accusing Cook of mortgage fraud.

Pulte alleged that Cook had claimed two primary residences in the states of Michigan and Georgia in 2021 to get better mortgage terms, reported the Associated Press.

In response, Cook has refused to step down. "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," she said in a statement. "I will not resign."

When asked at a cabinet meeting on Tuesday to respond to the lawsuit, Trump said: "She seems to have had an infraction."

"We need people that are 100 percent above board. And it doesn't seem like she was," Trump told reporters at the White House.

Trump said that he is still considering candidates to replace her. "We have some very good people for that position."

Earlier this month, following the resignation of Federal Reserve Governor Adriana Kugler, Trump nominated Stephen Miran, chair of the White House Council of Economic Advisers, to temporarily fill the vacant seat on the Federal Reserve Board of Governors.

The Justice Department last week opened a criminal investigation into Cook's alleged false statements on home mortgage applications, which were made before she took office as a member of the Federal Reserve Board of Governors on May 23, 2022.

Cook, nominated by former President Joe Biden, is the first Black woman to serve on the Fed's board.

Trump's attempt to remove Cook was depicted by media outlets as "unprecedented" in the history of the nominally independent US Federal Reserve Board.

The Fed on Tuesday said it would abide by any court decision.

"Congress, through the Federal Reserve Act, directs that governors serve in long, fixed terms and may be removed by the president only 'for cause,'" the central bank said, defending its longtime independence from politics.

"Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people," the Fed added.

Brookings Institution Senior Fellow Darrell West told Xinhua: "It is not clear Trump has the legal authority to fire Cook. No Federal Reserve Board member has been fired in 100 years and there has been no arrest or indictment of this individual. He is convicting her without any due process or legal process ... Cook is within her rights to stay on the board because she has not been charged with any crime."

Dean Baker, co-founder of the Center for Economic and Policy Research, told Xinhua: "Trump is having his political appointees look through mortgage records to find dirt on his political opponents. Using this dirt as a pretext to fire a Fed governor shows that he will stomp on anyone who gets in his way."

Dissatisfied with the Fed's refusal to lower interest rates at his request, Trump has recently repeatedly lashed out at Fed Chair Jerome Powell and urged him to step down early.

Cook has said the trade policies Trump is pursuing could suppress US productivity and may force the Fed to raise interest rates in a less efficient economic environment to contain inflation.

Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua: "Legally, she can fight. Chair Powell would be in exactly the same position if or when Trump comes after him. Powell has already said publicly that if Trump asked him to leave, he would not go. The fracas with Cook is a dress rehearsal for trying to get rid of Powell."