Trump renews push to oust Fed’s Cook ahead of expected rate cut

United States President Donald Trump has filed an appeal in the case involving Federal Reserve Governor Lisa Cook ahead of a key interest rate decision by the central bank this week.

Lawyers representing the Department of Justice on behalf of the president have appealed against a preliminary injunction issued by the district court on Sept. 9, regarding Trump’s decision to remove Cook from office. 

The administration argues that removal “for cause” is “a capacious standard that Congress has vested in the President’s discretion” and is not subject to judicial review. 

“When a statute gives a power of removal ‘for cause,’ without any specification of the causes, the removal decision is a matter of discretion and not reviewable,” it stated. 

President Trump attempted to remove Cook on Aug. 25 based on alleged “deceitful and potentially criminal conduct” concerning mortgage agreements, citing apparent misrepresentations in loan documents. Cook challenged this, arguing her firing exceeded presidential authority and violated her due process rights.

The case has led to a significant legal battle over presidential removal powers and renewed concerns over the Fed’s independence, raising questions over the reliability of the US dollar. 

New documents back Cook’s case  

However, new evidence appears to have emerged that directly contradicts the Trump administration’s mortgage fraud claims.

A May 2021 loan summary states that Cook’s Atlanta property was used for a vacation home, supporting her position that she properly disclosed it as a second home, not her primary residence, according to an NBC report on Saturday.

The documents could mean that there may be no actual misrepresentation in her mortgage applications, weakening the government’s arguments. 

Related: All roads lead to inflation: Fed cut or not, Bitcoin may stand to gain

Fed rate decision looms 

Trump’s appeal comes a few days before a key Federal Reserve interest rate decision on Wednesday.

The Fed is expected to unanimously cut rates this week for the first time since December 2024. 

Interest rates have been high in the US since early 2022. Source: TradingEconomics 

CME futures markets project a 96.4% probability of a 25 basis point cut to 4.0% to 4.25% on Wednesday, with a 3.6% chance of a larger 50 basis point cut. 

“Yes, you’re going to get your rate cut out there in trading land,” RSM chief economist Joe Brusuelas told Yahoo Finance, before adding that economic data doesn’t suggest that there will be three cuts before the end of the year.

Meanwhile, BlackRock executive Rick Rieder is climbing the list of contenders to serve as the next Fed chair after Jerome Powell’s term expires in May, according to Bloomberg. 

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