Supreme Court Appears Likely to Let Lisa Cook Keep Job on Fed Board
In a high-stakes case, the Supreme Court has heard arguments over President Trump's attempt to fire Lisa Cook from her position on the Federal Reserve Board of Governors. The court's decision could have significant implications for the US economy and the independence of the Federal Reserve.President Trump's Firing Attempt
Last August, President Trump attempted to oust Cook from her position on the Fed Board, citing allegations of mortgage fraud. However, lower courts had allowed Cook to remain in her post while she pursued a legal challenge to her firing. The Federal Reserve Act of 1913 gives the president the authority to remove a member of the Fed's Board of Governors 'for cause,' although the law does not define the term.
Oral Arguments Before the Supreme Court
During oral arguments, Solicitor General D. John Sauer argued that 'deceit or gross negligence' by a financial regulator is cause for removal and that the president has discretion to oust an officer for reasons related to her conduct, ability, fitness, or competence. However, several justices pressed Sauer about the consequences of a decision allowing Mr. Trump to fire Cook, including the potential impact on the US economy.
Justice Barrett's Concerns
Justice Amy Coney Barrett pointed out that economists have predicted that Cook's removal could trigger a recession. She asked Sauer how the court should think about the public interest in a case like this, highlighting the potential risks to the economy.
Justice Kavanaugh's Concerns
Justice Brett Kavanaugh expressed concerns about the implications of the administration's position in the case and how it would impact the Fed's independence. He noted that if the Supreme Court accepts Mr. Trump's view, a Democratic successor could come in and fire all of his appointees, effectively turning the Fed's for-cause removal standard into at-will.
The Supreme Court's decision on this case will have significant implications for the US economy and the independence of the Federal Reserve. The court's ruling is expected to be a closely watched event, with many economists and financial experts waiting to see how it will impact interest rates and the overall economic landscape.
