(Reuters) -Gurate Federal Reserve Lisa Cook filed a lawsuit on Thursday that US President Donald Trump has no authority to remove it from the office and prepare a legal battle that could reset the long established standards for the independence of the US central bank.
Cook’s lawsuit said that Trump had violated the federal law that allowed him to remove the Fed Governor only “for the reason” when the Republican President made an unprecedented step 25. August the announcement of fire. Trump accused Cook of committing mortgage fraud in 2021, a year before it joined the central bank control body.
However, Cook’s action stated that the unfounded accusation of the behavior that occurred before it was confirmed at its position in the central bank.
The “concept of” cause “of President Trump has no restrictive principle; It would allow him to remove every member of the Federal Reserve Council, with whom he disagrees with policy based on chalk accusations, ”wrote her lawyers in court proceedings.
The Court also accused Trump of violating her right to a proper trial according to the US Constitution by burning it without prior warning or hearing.
The case is probably aiming to the Supreme Court, where the conservative majority allowed Trump to shoot officials from other agencies, although recently signaling that the Fed may qualify for a rare exception to direct control by the president.
Concerns about the independence of the Fed on the White House in the determination of monetary policy could have a ripple across the global economy. The US dollar hit other main currencies after Trump first said he would remove Cook. On Thursday, the traders were traded because traders added that the Fed would reduce interest rates next month.
The Fed spokesperson stated on Tuesday before bringing the action that the Fed would comply with any court decision. The Fed did not answer the comment immediately on Thursday.
Cook was appointed to Fed in 2022 by democratic former President Joe Biden and is the first black woman to serve as a Fed governor.
At the beginning of this year, Trump also burned Gwynne Wilcox, the first black woman to sit on the National Council for Work Relations, who hears work disputes in the private sector. Trump also rejected a lot of officials from other agencies that have long been considered independent of the White House.
The law created by the Fed does not define the “cause” or does not create any standards or procedures for removal. No president has ever removed a member of the Fed Board of Directors and the law has never been tested in court.
Several federal laws requiring that the President should have the cause before the removal of members of other agencies, claims that this deadline may include neglect of duties, incorrectness and inefficiency. These laws could be a guide to the courts to determine whether Trump had no reason to fire Cook.
William Pulte, the denominator of Trump, the director of the Federal Housing Financing agency, raised questions about cook mortgages for the first time in August. Pulte advanced the matter to the General Prosecutor Pamela Bondi for investigation.
In 2021, Cook pulled his mortgages in Michigan and Georgia when it was academic. The official financial publication form for 2024 lists three mortgages held by Cook, two of which are listed as personal residences. Primary residence loans can bear lower rates than mortgages from investment real estate that banks consider to be more risky.
Some experts questioned whether the transactions that preceded Cook’s appointment in the Fed were in a public record when it was tested and confirmed by the US Senate could be a sufficient reason to remove it.
Trump’s administration could also claim that grooming Fed Governors violates any protection against removal of the President’s wide constitutional powers to control the executive branch, as in courts submitted by other ex-inficials.
Trump in letter 25 August Cook accused her of dealing with “deceptive and criminal behavior in a financial affair” and said that she had no confidence in her integrity.
Cook’s departure would allow Trump to name his fourth selection for the Fed’s seven -member Council.
The President repeatedly cursed Fed Chairman Jerome Powell for non -discipline and his alleged incorrect handling of the Renovation project worth several billion dollars, even though he stopped the threat to remove Powell before his term in May.
Trump’s administration also focused on political opponents, including American Senator Adam Schiff and the General Prosecutor in New York, with similar accusations on mortgage fraud. Schiff and James denied unlawful conduct.
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