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Justice Brett Kavanaugh, who was also appointed by Donald Trump, said that allowing her firing ‘would weaken, if not shatter, the independence of the Federal Reserve.’
The United States Supreme Court on Wednesday, January 21, has signalled support for Fed Governor Lisa Cook, casting doubt over Donald Trump's bid to fire her and wrest control over the central bank. In its remark, the Supreme Court said that removing Lisa Cook would weaken the independence of the Federal Reserve.
Arguments were heard over Trump’s effort to fire Cook based on allegations she committed mortgage fraud, which she denies. Justice Brett Kavanaugh, who was also appointed by Donald Trump, said that allowing her firing “would weaken, if not shatter, the independence of the Federal Reserve.”
At least five other justices on the nine-member court also sounded skeptical about firing her.
What do critics say about it?
Critics of Trump argue that the real goal behind the attempt to remove Cook is to gain greater influence over U.S. interest rate policy. If she were ousted, Trump could appoint a replacement of his choosing, potentially giving him majority control of the Federal Reserve’s board, they suspect.
Trump has dismissed the speculations that cutting interest rates could trigger higher inflation.
The board cut a key interest rate three times in a row in the last four months of 2025, but that’s more slowly than Trump wants. The Fed also suggested it may leave rates unchanged in coming months over inflation worries.
The issue before the court is whether Cook can stay on the job while her challenge to the firing plays out in court. Judges on lower courts have allowed her to remain in her post as one of seven central bank governors.
What is Lisa Cook accused of?
Cook is among the people accused of mortgage fraud by federal housing official Bill Pulte. They have denied the allegations against them.
She is accused of listing two different homes as her main residence at the same time – one in Michigan and one in Georgia – in mid-2021, before she became a Federal Reserve governor.
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.
Those applications, D. John Sauer, the U.S. solicitor general arguing for Trump's administration, said, are evidence of “gross negligence at best”and give Trump reason to fire her.
He has also argued that Lisa Cook has no right to a hearing.
Cook has denied any wrongdoing. “There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” a Cook lawyer, Abbe Lowell, wrote to Attorney General Pam Bondi in November.
Cook specified that her Atlanta condo would be a “vacation home,” according to a loan estimate she obtained in May 2021.
(With AP inputs)
English (US) ·