Fed Governor Lisa Cook has indicated that she has no intention to step down from the Federal Reserve despite Trump’s attempt to fire her. Her lawyer has revealed that they will challenge the president’s power to remove her even as he continues to push for a rate cut.
Lisa Cook To Sue Trump Over Firing
According to a CNBC report, the Fed Governor’s lawyer, Abbe Lowell, has said that they will file a lawsuit challenging her removal by the president. The lawyer claimed that Trump has no authority to remove the Federal Reserve Governor.
Lowell further remarked that Trump’s attempt to fire Lisa Cook based solely on a referral letter lacks any factual or legal basis. In line with this, he stated that they will be filing a lawsuit challenging this “illegal action.”
As CoinGape reported, Trump fired the Fed Governor yesterday, in an unprecedented move, as it marked the first time in U.S. history that a president has fired a member of the Fed board. The law provides that the president can only fire a member of the board “for cause.”
Trump justified this move based on the fact that the Department of Justice (DOJ) is currently investigating Lisa Cook for mortgage fraud, a move which the FHFA Chairman Bill Pulte claimed was done to secure lower interest rates.
Therefore, the president claimed that Cook cannot continue in her position, considering that the American people need to have faith in the Fed, which is responsible for determining interest rates.
The Push For A Fed Rate Cut
Trump’s motives in firing Lisa Cook are in question, as it comes at a time when the president is pushing for interest rate cuts, with the September FOMC meeting fast approaching. Notably, the Fed Governor isn’t the first to have faced a criminal referral. Last month, Trump ally Rep. Anna Paulina Luna criminally referred Fed Chair Jerome Powell over perjury claims.
In an X post, market commentator The Kobeissi Letter stated that the president is making this move to fire the Fed Governor because it would give the Trump-appointed Fed Governors the majority on the Fed Board.
Source: The Kobeissi Letter X
If Lisa Cook leaves, it would mean that four out of the seven Fed Governors, excluding Jerome Powell, would be Trump appointees. The Kobeissi Letter noted that this would materially increase the number of rate cuts ahead.
Therefore, the market commentator declared that this case would be pivotal as President Trump calls for a 300 basis points (bps) of rate cuts. They noted that never in Fed history has this happened.
In the meantime, the crypto market has its eyes on a September Fed rate cut. CME FedWatch data shows that there is an 86.3% chance of a 25 bps rate cut at the FOMC meeting next month.
Source: CME FedWatch
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Boluwatife Adeyemi
Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across several niches. His speed and alacrity in covering breaking updates are second to none. He has a knack for simplifying the most technical concepts and making them easy for crypto newbies to understand.
Boluwatife is also a lawyer, who holds a law degree from the University of Ibadan. He also holds a certification in Digital Marketing.
Away from writing, he is an avid basketball lover, a traveler, and a part-time degen.
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