A new CNBC report has announced that President Donald Trump is prohibited from removing Federal Reserve Governor Lisa Cook before the central bank’s policy committee decides on whether to decrease interest rates, according to a federal appeals court’s decision on Monday.
The U.S. Court of Appeals for the District of Columbia Circuit’s panel of judges ruled 2-1, allowing Cook to attend the Federal Open Market Committee’s (FOMC) crucial two-day meeting beginning on Tuesday, September 16.
However, the appellate court concluded in its brief judgment Monday night that they had “not satisfied the stringent requirements for a stay pending appeal.”
Trump Moves to Terminate Fed Governor Cook
White House spokesperson Kush Desai stated that the Trump administration would appeal the ruling to the Supreme Court.
“The President lawfully removed Lisa Cook for cause,” Desai said in a statement. “The Administration will appeal this decision and looks forward to ultimate victory on the issue.”
In late August, Trump attempted to remove Cook “for cause,” citing claims of mortgage fraud made by Bill Pulte, the Housing Finance Director for his administration.
Though Trump, who claims to want interest rates lowered, has frequently shown scant respect for worries about the central bank’s independence, the CNBC report noted that the move was unusual.
Although the Supreme Court seemed to provide some protection for Fed Chair Jerome Powell in a May ruling, he has repeatedly criticized Powell for his refusal to cut rates and at one point even trying to dismiss him.
Although Trump has retracted his threats against Powell, he has gone ahead and fired Cook, a former Joe Biden appointee who had voted in unison with Powell. Cook sued to prevent her from being fired. Additionally, fraud involving mortgages is something she has further denied.
Former Biden Appointees Speak Out
J. Michelle Childs and Bradley Garcia, two former President Joe Biden appointees who opposed Trump’s request for a temporary stay, are among the three judges on the appeal panel.
In a concurring statement, Garcia said that U.S. District Judge Jia Cobb, who blocked Cook’s termination last week, was “correct” in concluding that Trump’s decision most certainly violated the due process clause of the Constitution.
“For that reason—and because of the myriad unique features of this case as compared to other recent challenges to presidential removals—I vote to deny the government’s emergency request for a stay pending appeal,” Garcia wrote in his concurrence, which was joined by Childs.
Conversely, Gregory Katsas, a Trump appointee and third judge, stated in a dissenting opinion that the president’s request would have been approved.
“In my view, both holdings are mistaken, and the equitable balance here tips in favor of the government,” Katsas wrote. “So, I would grant the government’s motion for a stay pending appeal.”
Katsas expressed his disagreement with Cobb’s conclusions that Cook had a constitutionally protected property interest in her office and cannot be dismissed for actions that occurred before she was appointed to the Fed.
The Federal Open Market Committee (FOMC) will meet from September 16–17. Fed Chairman Powell will hold a news conference at 2:30 p.m. ET on Wednesday, September 17, following the meeting, which includes a well-anticipated rate decision.
