Fed Governor Lisa Cook is also suing in an attempt to combat Trump in an attempt to remove her and it would create a showdown between presidential power.

   Federal Reserve Governor Lisa Cook is suing to maintain her seat in the board that determines interest rates, following the removal earli...

 

 Federal Reserve Governor Lisa Cook is suing to maintain her seat in the board that determines interest rates, following the removal earlier this week announced by President Donald Trump.

 The move by Cook, submitted in federal court in Washington, DC, Thursday morning, asks a judge to decide that Trump is illegally trying to remove her and that she remains an active member of the Federal Reserve.

 Hearing on her request of a temporary restraining order is set on Friday at 10 a.m. ET before a former President Joe Biden appointee, Judge Jia Cobb.

 The complaint by Cook frames what might turn into a high-stakes court battle with sweeping implications on the Federal Reserve and presidential authority, as Trump endeavors to stamp his authority over parts of the government traditionally deemed unreachable to politics.

 Without emergency relief, defendants are now expected to suffer an unexpired vacancy to arise in which President Trump has stated that he is willing to fill, the lawyers of Cook wrote in their motion.

 Nevertheless, the White House said that Trump had dismissed Cook in a constitutional manner.

 The President had decided there was reason to remove a governor who was credibly charged with lying in financial documents in a highly sensitive post managing financial institutions, White House spokesman Kush Desai said in a statement on Thursday.  The removal of a governor, in the opinion of the Federal Reserve Board, enhances the board accountability and credibility to the markets and American people.

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 Mortgage fraud allegations

 In her lawsuit, Cook states that the sudden termination of her employment by Trump was a violation of her due process rights under the Constitution and federal law, which provides them with reasonable notice of her purported misconduct and the hearing during which they can respond to the charges.

 Her attorneys alleged that she was fired without notice or having a hearing before the alleged firing, according to the lawsuit, to Governor Cook.  This charge of conduct which pre-dates the confirmation of Governor Cook in the Senate has never been investigated, much less proved.

 She further asserts that Trump is seeking to change the meaning of the term cause in order to fire any board member with whom he does not agree on a policy on the basis of chalked up claims.

 She and her counsel argued that President Trump does not have the power to redefine the meaning of cause unilaterally - entirely without reference to caselaw, history, and tradition - and find, without evidence, that he has discovered it.

 Trump provided a copy of a letter to Cook on social media on Monday, which told her that he had enough cause to fire the central bank official.  The letter cited claims of mortgage fraud originally raised by Federal Housing Finance Agency Director Bill Pulte.

 Trump and his friends have implicated Cook of mortgage fraud of two homes that she owns and both of which she seems to have listed as her main residence.  The Trump administration has also announced that it is probing other perceived political adversaries of the president on potential mortgage fraud, among them New York Attorney General Letitia James and California Senator Adam Schiff.

 The Justice Department has indicated that it plans to probe the claims of Pulte.  Cook has not been accused of any offence.

 Another thing that Cook is demanding that the court should pronounce is that an allegation of mortgage fraud that has not been substantiated before a confirmation of a Governor is not a matter of removal under the federal law.

 Draw a line around the Fed.  In the short term, the termination of Cook can be a legal issue due to the fact that Trump believed in firing at will, despite unproven allegations and investigation processes.

 The 24-page motion, in federal court in Washington, DC, charges Trump with trying to use fraud claims to avoid federal law that is meant to protect her against the interference of the president.

 The attorneys of the lawsuit wrote that it is apparent by the events that surrounded the alleged ousting of Governor Cook to the Federal Reserve Board that the mortgage claims against her are pretextual, so as to enable President Trump to fill the vacant position and advance his agenda of injuring the autonomy of the Federal Reserve.

 Jane Manners, an associate professor at Fordham Law School who studies presidential power, said it is a big case.  What is the future of our economy? asks the question, but if we are going to leave the membership of the Fed to politics?

 A number of other quasi-independent federal government officials have also failed to maintain their jobs, even through emergency litigation.

 This year Trump was permitted by the majority conservative Supreme Court to terminate the heads of independent federal agencies on several occasions.  The court has already drawn a circle around the Fed.  In May, the court termed the Federal Reserve as an institution that is distinctly organized and had a lengthy history of not being meddled by political interference by the White House and thus it should not be tampered with.

 A judge would be able to decide whether Cook can keep serving in her present post or whether she has to resign until the judicial procedures are later exhausted.

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 A court ruling in a legal challenge by Cook to her attempted termination is what the Fed said in a statement on Tuesday that it would adhere to.

 According to the Fed, Lisa Cook has stated via her personal attorney that she will immediately move to court to have a court decision enabling her to remain capable of continuing to perform her duties as a senate-confirmed member of the Board of Governors of the Federal Reserve System.

 The president may fire any governor of the Fed, but it remains open whether the standard is satisfied by unverified claims.

 The Trump has been accusing the Fed leadership as being too slow to reduce interest rate.

 When Cook is permitted to continue as a Fed governor indefinitely, she will be qualified to vote in the next Fed meeting on September 16-17.  Futures markets anticipate that Fed policymakers will lower interest rates the first time since December.

 Since Pulte charged her with mortgage fraud, Cook has not been publicly discussing the economy.  On August 6, after the July jobs report, she spoke most recently about the economy, in a moderated discussion held by the Boston Fed.

 She termed the recent slowdown in employment creation as concerning and that the labor market was at cross roads.

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