Trump Tries to Fire Federal Reserve Governor Despite Legal Concerns

President Donald Trump is pushing the boundaries of his authority with an attempt to fire Federal Reserve Governor Lisa Cook, a move that’s sparking legal debate. On Monday, Trump announced he was firing Cook, citing an unproven allegation of mortgage fraud, made by his housing finance chief, Bill Pulte.

Cook has denied any wrongdoing and has refused to leave her position, filing a lawsuit that will ultimately send the issue to court, reported Politico.

The legal backdrop to this is complicated. In May, the Supreme Court issued a decision that theoretically limits the president’s power to fire certain officials, but some experts believe Trump may be betting that the court won’t challenge him on this.

The case involved a decision on labor-related federal boards, with the court’s conservative majority saying the Federal Reserve should be treated differently from other independent agencies within the executive branch. The justices noted that the Fed is “a uniquely structured, quasi-private entity” with a historical precedent that goes back to the First and Second Banks of the United States.

Trump is now testing that boundary with his decision to fire Cook “for cause,” which hinges on an unproven claim about mortgage fraud. Legal experts suggest the court may hesitate to intervene in the president’s subjective judgment on what constitutes an acceptable “cause” for dismissal.

Although the accusation against Cook remains unproven, some believe Trump’s real frustration lies in the Federal Reserve’s refusal to lower interest rates, which he has publicly criticized.

Harvard Law professor Jack Goldsmith shared his thoughts on the matter via social media, stating, “There have been two institutional constraints on Trump 2.0: The courts and markets. The firing of Lisa Cook ‘for cause’ may be pretextual but is not obviously illegal.”

However, not all conservatives are backing Trump’s actions. Longtime GOP commentator Erick Erickson cautioned that undermining the independence of the Federal Reserve could have long-term consequences.

He warned that declaring Cook guilty of misconduct without any due process is “playing with fire” and could set a dangerous precedent for future administrations.

This is just the latest move in the ongoing battle between Trump and the Federal Reserve, with the president pushing back against the institution’s decisions that don’t align with his economic priorities. Whether the courts will uphold his attempt to fire Cook remains to be seen, but it’s clear that this issue isn’t going away anytime soon.