The Federal Reserve issued a statement obliquely pushing back on President Trump's shock firing of board member Lisa Cook, which has disturbed business as usual in Washington, D.C.
The central bank didn't directly acknowledge that Trump had fired Cook, instead noting that the Biden appointee is taking legal action to challenge her removal for alleged mortgage fraud.
"As always, the Federal Reserve will abide by any court decision," the Fed said in its statement.
Behind its measured language, the bank insinuated that it views Cook's removal as a threat to the so-called independence of the Fed, which is said to be insulated from politics.
In a pointed comment, the Fed suggested that Cook's firing was improper, noting that Fed governors "may be removed by the president only ‘for cause.'"
“Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people,” the Fed spokesperson said.
Trump explained his decision to fire Cook in a letter Monday, citing a mortgage fraud allegation forwarded to the Justice Department that accused Cook of claiming two different homes as her primary residence simultaneously.
Cook's lawyer, former Hunter Biden attorney Abbe Lowell, filed a lawsuit Thursday in Washington D.C., arguing that an unproven allegation does not meet the "for cause" threshold.
The case was assigned to judge Jia Cobb, a Biden appointee, who set a hearing Friday morning to weigh Cook's request.
Lowell noted that Cook is “the first black woman to sit on the Federal Reserve’s Board in its 111-year history."
Lowell further added that even if the allegations are true, they should not count against her because they concern "private" conduct that occurred before she joined the Federal Reserve.
The White House has argued, however, that Cook's alleged conduct is disqualifying for a top financial regulator.
In a statement, White House spokesman Kush Desai said Trump “exercised his lawful authority to remove a governor” based on being “credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions.”
Congress has given presidents the authority to fire Fed governors "for cause", but no president before Trump has invoked this power.
It is unsurprising that the Fed would assert its long-standing independence against Trump's unprecedented move, but the central bank does not come out looking good, either, by defending a member who it appears has been credibly accused of unethical conduct.
