US justice Department urges SC to allow firing of Federal Governor Lisa Cook

The US Justice Department has asked the Supreme Court to uphold President Trump’s removal of Federal Reserve Governor Lisa Cook, sparking a legal battle over Fed independence as Cook challenges the decision.

Washington: The US Justice Department has urged the Supreme Court to put into effect President Donald Trump’s firing of Federal Reserve Governor Lisa Cook.

Solicitor General D. John Sauer wrote in an application that the lower court’s decisions “flout many strands of this Court’s precedents,” local media reported Thursday.

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The application may spark a high-stakes battle at the Supreme Court over the independence of the Federal Reserve, Xinhua news agency reported.

Trump fired Cook on August 25 over alleged mortgage fraud. Cook denied any wrongdoing and filed a lawsuit in a federal court in Washington, D.C., on August 28. A judge ruled on September 9 to temporarily block Trump’s removal of Cook.

The Trump administration then took the case to the US Court of Appeals for the District of Columbia Circuit ahead of a Fed meeting, but the court rejected Trump’s bid to remove Cook on Monday, just hours before the Fed’s two-day meeting began.

Cook participated in the Federal Open Market Committee meeting on Tuesday and Wednesday, joining the majority in voting for a quarter-point rate cut.

Appointed by former US President Joe Biden to complete another member’s unexpired term in 2022, Cook’s current term runs until 2038. She made history as the first Black woman to serve as a Federal Reserve governor.

Cook filed a lawsuit against Trump in August, challenging his attempt to remove her from office. She argues the reasons cited were legally insufficient and served as a pretext to oust her over disagreements on monetary policy.

In a filing submitted Thursday, the Justice Department stated that as long as a president cites a cause for removal, that decision falls within the scope of his “unreviewable discretion.”