U.S. federal appeals court has rejected President Donald Trump’s effort to remove Federal Reserve Governor Lisa Cook, setting up a last-minute showdown before the central bank’s key interest rate meeting on Tuesday.
The 2-1 ruling from the D.C. Circuit Court of Appeals leaves Cook, a Biden appointee, in place just hours before the Federal Open Market Committee begins its September session. The administration has said it will urgently appeal to the Supreme Court, which could determine whether Cook is allowed to participate in the meeting.
Judges J. Michelle Childs and Bradley Garcia, both nominated by President Joe Biden, voted to keep the Federal Reserve Governor in her post. Judge Gregory Katsas, a Trump appointee, dissented, arguing that the president has broad discretion to decide what constitutes “cause” for removal.
Trump moved to fire the Federal Reserve Governor last month, alleging she committed mortgage fraud by claiming two homes as her primary residence to secure lower rates. She has denied the allegations. Federal law allows presidents to remove Federal Reserve governors “for cause,” a term that courts have generally interpreted to mean misconduct or malfeasance.
U.S. District Judge Jia Cobb last week dismissed the administration’s earlier attempt to oust her, finding that she was not given proper notice or a chance to respond to the accusations, which she said violated her due process rights.
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In their opinion, the appellate majority declined to rule on whether the allegations against the Federal Reserve Governor meet the legal threshold for removal. They said that question could be addressed later, but found no basis to immediately suspend Cobb’s ruling.
Katsas, in dissent, warned that leaving the Federal Reserve Governor in place risked allowing a potentially compromised official to vote on monetary policy. “The Board of Governors no doubt is important, but that only heightens the government’s interest in ensuring that its governors are competent and capable of projecting confidence into markets,” he wrote.
The administration’s emergency appeal will go to Chief Justice John Roberts, who handles such requests from the D.C. Circuit. He could issue a temporary order blocking the Federal Reserve Governor from participating while the full Supreme Court considers the case.
Roberts has recently granted similar temporary orders in cases involving Trump’s attempts to remove other Biden-era appointees, including members of the Federal Trade Commission and National Labor Relations Board.
Africa Daily News, New York.
