The Federal Reserve said Tuesday it will abide by the court’s decision in the upcoming lawsuit from Fed board of governors member Lisa Cook challenging her firing by President Trump.
“Lisa Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System,” a spokesperson for the Fed said in a statement.
“The Federal Reserve will abide by any court decision,” the spokesperson added.
After Trump issued a letter on Monday saying he was firing Cook over alleged mortgage fraud, Cook’s attorney Abbe David Lowell said Trump didn’t have the power to fire Cook.
“President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” he said in a statement.
On Monday evening, Trump posted a letter to Cook on his social media account that said he was removing her from her position.
“You are hereby removed from your position on the Board of Governors of the Federal Reserve, effectively immediately,” the letter said.
The firing by Trump and the challenge by Cook escalates the ongoing pressure campaign from the White House on the Fed to a new level. Trump has been telling the Fed to lower interest rates for months, and so far, the committee has declined to heed his calls.
Prices have been rising in the economy over the past few months, while unemployment has stayed low despite a downshift in the labor market.
The Fed’s mandate is to keep unemployment and prices low, which it does by tweaking the short term interest rate to adjust profitability. When interest rates are higher, profits are lower, deterring companies from hiring, and when interest rates are lower, profits are higher, encouraging companies to hire and make investments.
Trump is keen to see the economy perform well despite the upside price risks, so he has been putting pressure on the Fed through some unorthodox means.
Beyond barking orders at Powell and making fun of him, Trump accused Powell of fraud over a cost overrun for a Fed facilities renovation. He sprung a new cost estimate on Powell during a rare joint appearance by the two men, but Powell dismissed it.
Federal Housing Finance Agency (FHFA) Director Bill Pulte then accused Cook of mortgage fraud, citing documents that allegedly show Cook having designated two different houses as her primary residence.
Pulte has attacked other political enemies of the president from his position atop the FHFA, which oversees government-backed mortgage securitizes Fannie Mae and Freddie Mac.
He accused Sen. Adam Schiff (D-Calif.), an instrumental figure in the Jan. 6 committee hearing that responded to the attack on the Capitol, and New York attorney general Letitia James, who has brought multiple lawsuits against the president, of mortgage fraud.
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