The fallout from President Donald Trump firing Federal Reserve Governor Lisa Cook doesn’t seem to be slowing down anytime soon. And now that Cook has filed a lawsuit contesting her removal, the fate of the entire institution is also at stake.
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As we previously reported, the president moved to remove Cook, the first Black woman to ever serve on the Fed’s board of governors, earlier this week, citing allegations of mortgage fraud. Cook hasn’t been charged with any crimes, so now she’s taking the matter to court. But while this case seems like a simple one, the outcome from the lawsuit could change the Fed forever.
“Governor Cook has been thrust into a role she did not seek and doubtless would prefer to shed — suddenly being cast in a larger-than-life struggle to defend an institution that has helped foster the economic and financial success of the U.S. over the post-World War II period,” David Wilcox, a senior fellow at the Peterson Institute for International Economics and a former leader of the Fed’s research and statistics division, told the New York Times.
According to Cook’s legal team, there were no formal investigations or charges before she was removed. And after making the move, Trump reportedly told his Cabinet, “We’ll have a majority very shortly. So that’ll be great,” NBC News reported. During the first hearing on Friday (Aug. 29), Judge Jia Cobb said Trump’s words made her uncomfortable.
“This case obviously raises important questions,” Cobb said. Those against Cook’s firing argued if she is successfully removed, it would lead to another vacancy on the board. With that, the president could “move that body in a direction more to his liking,” the judge continued.
As the first Black woman in her position, Cook promised she wouldn’t be easily moved from the Fed board. But as she continues to fight for her job, she’s also fighting for the independence of the Fed. This wouldn’t be the first time Trump has fired an official seemingly out of the blue. Earlier this month, he fired Erika McEntarfer, the former commissioner of Labor Statistics. Now, he’s nominated an Jan. 6 apologist, E.J. Antoni to replace her, NBC News reported.
With the integrity of the Fed up in the air, Cook’s legal team called the attack “an obvious smear campaign aimed at discrediting Gov. Cook.” They continued, “Nothing in these vague, unsubstantiated allegations has any relevance to Gov Cook’s role at the Federal Reserve, and they in no way justify her removal from the Board.”
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