In a filing with the court Saturday, attorneys on behalf of Cook asked the court to refuse an emergency request by the Trump administration for a stay of a lower court ruling that would clear the way for President Donald Trump to remove Cook from the Federal Reserve’s board of governors.
Lawyers for Cook argue that the Trump administration has not shown sufficient cause to fire her, and stressed the risks to the economy and country if the president were allowed to fire a Fed governor without cause.
“A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve. Nothing would then stop the president from firing other members of the board on similarly flimsy pretexts. The era of Fed independence would be over. The risks to the nation’s economy could be dire,” according to the filing.
The court has given the Trump administration the option to respond to Cook’s filing by 3 p.m. Eastern on Sunday.
Trump has accused Cook of mortgage fraud because she appeared to claim two properties as “primary residences” in July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home.
If the Trump administration’s appeal succeeds, Cook would be removed from the Fed’s board until her case is ultimately resolved in the courts, and she would miss next week’s Fed meeting, when the central bank is set to decide whether to reduce its key interest rate.
If the appeals court rules in Cook’s favor, the administration could seek an emergency ruling from the Supreme Court.
When the Fed reduces its key rate, it often, over time, lowers borrowing costs for mortgages, auto loans, and business loans. Some of those rates have already fallen in anticipation of cuts from the Fed.
