President Donald Trump’s unprecedented attempt to fire Federal Reserve Board Governor Lisa Cook will likely end up in the hands of the Supreme Court, according to Wall Street economists and analysts.
Trump on Monday evening claimed to fire Cook “for cause” effectively immediately over allegations she made false statements on applications for home mortgages.
It is the first time a president has attempted to fire a Fed governor since Congress established the central bank in 1913, Evercore ISI told clients in a note Tuesday.
“Although we think it could go either way, our guess is that SCOTUS will uphold this move,” Wolfe Research head of U.S. policy and politics Tobin Marcus told clients Tuesday. “The legal protections for the Fed chair and for non-chair governors are the same, so a SCOTUS ratification of this move would sharply erode Fed independence, and even the attempt to fire Cook raises obvious concerns.”
Cook said she would not leave her post, arguing that Trump had no cause under the law to fire her. Cook’s lawyer Abbe Lowell said Tuesday that they “will be filing a lawsuit challenging this illegal action.”
