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A federal appeals court has rejected President Donald Trump's attempt to remove Federal Reserve Governor Lisa Cook, per HuffPost.
Last month, Trump claimed to have fired Cook, marking the first time a president has attempted to remove a sitting Fed governor. Trump cited mortgage fraud allegations pushed by his ally, Bill Pulte, as "cause" for Cook's removal. The allegations are currently under investigation by the Justice Department. Cook has denied any wrongdoing.
A lower court ruled last week that Trump's attempt to fire Cook was illegal, defining "cause" as misconduct while in office. Pulte has accused Cook of mortgage fraud for listing two properties as “primary residences” in 2021. Cook, the first Black woman to serve on the Fed’s board, didn't join the agency until 2022.
Trump’s lawyers argued that the alleged conduct, even if pre-dating her Senate appointment, shows she is unfit to shape U.S. economic policy.
“Her alleged action indisputably calls into question Cook’s trustworthiness,” they wrote in the emergency appeal.
In a 2-1 decision, an appeals court affirmed the lower court decision on Monday (September 15), saying Cook's due process rights were violated as the administration didn't give her a formal opportunity to respond to the allegations.
Following the appeals court ruling, Cook is set to participate in the Fed's two-day policy meeting beginning on Tuesday (September 16), which could result in an interest rate cut. The Trump administration is expected to ask the Supreme Court to intervene in the case before the policy meeting starts.
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