Supreme Court mulls Trump's attempt to fire Fed Gov. Lisa Cook

by · UPI

Jan. 21 (UPI) -- The U.S. Supreme Court will hear oral arguments on Wednesday over President Donald Trump's attempt to fire the governor of the Federal Reserve board Lisa Cook.

The court's decision on the matter will make known its view of the president's power to remove members of the Federal Reserve, an independent agency.

The Trump administration alleges that Cook committed mortgage fraud, a claim she denies. Her attorneys argue that she must be given a chance to respond to the administration's allegations before being fired and that the reason for her firing does not meet the threshold for cause.

The Federal Reserve Act gives the president the power to remove members of the Federal Reserve for cause but what is considered cause has not been made clear. The Supreme Court's decision may provide more clarity about how this court views the threshold for cause and the limits of the president's power to remove officials.

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Wednesday's hearing comes as the Trump administration is also investigating Federal Reserve Chair Jerome Powell. The administration has raised concerns about a $2.5 billion renovation project at two Federal Reserve buildings in Washington, D.C., alleging Powell has mishandled the project.

Trump has been at odds with the Federal Reserve and Powell, whom he appointed in 2018, over maintaining higher interest rates than he would like. The Fed has kept interest rates elevated as an attempt to curb inflation.

In October, the Supreme Court halted Cook's firing, ruling that Wednesday's hearing must take place first.

The Trump administration said in court documents that Cook does not have the right to respond or challenge her firing. Solicitor General John Sauer said the president may decide what constitutes "cause."

Cook was appointed by former President Joe Biden and is serving a term ending in 2038.