Fed Governor firing case proceeds without court ruling

ISTANBUL

A federal court hearing ended Friday without a ruling on Federal Reserve (Fed) Governor Lisa Cook's request for temporary protection from dismissal while her lawsuit against President Donald Trump plays out, CNBC reported.

Cook's attorney, Abbe Lowell, challenged the Justice Department's position that Trump possessed legal grounds to remove Cook based on mortgage fraud accusations. Federal Housing Finance Agency Director Bill Pulte had alleged that Cook committed fraud in documents for properties in the cities of Atlanta and Ann Arbor, Michigan, prior to joining the Fed.

Lowell criticized the administration's reliance on social media statements, telling Judge Jia Cobb in Washington DC District Court that Pulte's communications could not justify the dismissal. Justice Department representatives countered that determining the cause for removing a Fed governor falls within presidential discretion.

Cobb acknowledged the case's significance, noting it raises important questions that may be without precedent, particularly regarding Federal Reserve Board governance. The Federal Reserve Act stipulates that presidents can only remove Fed governors for cause, creating a legal framework that limits executive authority over monetary policy leadership.

Cook filed lawsuits Thursday against Trump, the Fed Board of Governors and Fed Chairman Jerome Powell, which said the president fired her illegally, and she sought an injunction to keep her employed while the case was pending.

Trump requested a federal judge to deny Cook's request for an order Friday preventing the president from dismissing her.

The Fed said Tuesday that it will follow any court decision that determines whether Trump can fire Cook.

The dispute began Monday, when Trump announced that he had fired Cook in an unprecedented move, citing allegations of mortgage fraud.

The move came after Trump warned Cook last week that he would dismiss her if she did not step down.

Cook, who was nominated to the Fed's Board of Governors by former President Joe Biden in 2022, has denied any wrongdoing and said she has "no intention of being bullied to step down."