Status of Fed governor Cook uncertain after first hearing on Trump firing
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Federal Reserve governor Lisa Cook testifies at her confirmation hearing before Congress in 2023. Photo: Drew Angerer/Getty Images
Federal Reserve governor Lisa Cook finished a whirlwind week with uncertainty over her job status as one of the nation's top economic policymakers.
Why it matters: A federal court is expected to rule soon on whether Cook can keep her job as a historic legal battle runs its course, but the first hearing ended on Friday with no clear decision on the matter.
State of play: Consider the events of recent days.
- This time last week, housing regulator Bill Pulte purported to have fresh evidence that Cook committed mortgage fraud. On Monday, Trump announced Cook's firing.
- On Friday, her lawyers appeared in federal court to make the case that she keep her job — just hours after the administration lobbed a third allegation of mortgage fraud at her.
Driving the news: The Trump administration asked the judge to deny Cook's request for an order to stay on as a Fed governor as the legal battle plays out.
- In a separate court filing, the Fed — named as a defendant, given its role to carry out Trump's firing order — asked for "a prompt ruling ... to remove the existing cloud of uncertainty."
The intrigue: Cook's legal team is staking out a position that Trump does not have cause to fire the official. The argument is less focused on whether Cook actually committed mortgage fraud, an allegation for which she has not been charged.
- During Friday's hearing, Judge Jia Cobb posed a hypothetical question to Cook's legal team about whether the Trump administration would have cause to fire the official if the allegations were accurate.
- She asked Trump's lawyers about the possibility that the stated reason for firing was "demonstrably false."
- In the complaint filed Thursday, Cook's legal team said that even if Cook "erred in filling out a mortgage form prior to her Senate confirmation," it would not amount to cause to remove her from the post.
- Trump lawyers said on Friday that the president has discretion over what constitutes cause.
The intrigue: Pulte, director of the Federal Housing Finance Agency, said Friday he made a second criminal referral to the Department of Justice over allegations that Cook said a property would serve as a second home, but was later listed in disclosures as a rental property.
The bottom line: Cook's status may remain unclear through the long holiday weekend, as the countdown begins to the Fed's Sept. 16-17 policy meeting with uncertainty over whether she'll be able to participate.
