‘The era of Fed independence would be over,’ Cook’s lawyers warn

In a filing with the court Saturday, attorneys on behalf of Cook asked the court to refuse an emergency request by the Trump administration for a stay of a lower court ruling that would clear the way for President Donald Trump to remove Cook from the Federal Reserve’s board of governors.

Lawyers for Cook argue that the Trump administration has not shown sufficient cause to fire her, and stressed the risks to the economy and country if the president were allowed to fire a Fed governor without cause.

“A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve. Nothing would then stop the president from firing other members of the board on similarly flimsy pretexts. The era of Fed independence would be over. The risks to the nation’s economy could be dire,” according to the filing.

The court has given the Trump administration the option to respond to Cook’s filing by 3 p.m. Eastern on Sunday.

At stake is whether the Trump administration will succeed in its extraordinary effort to shape the board before the Fed’s interest rate-setting committee meets Tuesday and Wednesday. At the same time, Senate Republicans are pushing to confirm Stephen Miran, President Donald Trump’s nominee to an open spot on the Fed’s board, which could happen as soon as Monday.

Trump has accused Cook of mortgage fraud because she appeared to claim two properties as “primary residences” in July 2021, before she joined the board. 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.

Cook has denied the charges and sued the Trump administration to block her firing.

On Tuesday, U.S. District Court Judge Jia Cobb ruled the administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook did not join the Fed’s board until 2022.

The administration then appealed the decision and asked for an emergency ruling reversing the lower court order by Monday. In their emergency appeal, Trump’s lawyers argued that even if the conduct occurred before Cook’s time as governor, her alleged action “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”

If the Trump administration’s appeal succeeds, Cook would be removed from the Fed’s board until her case is ultimately resolved in the courts, and she would miss next week’s Fed meeting, when the central bank is set to decide whether to reduce its key interest rate.

If the appeals court rules in Cook’s favor, the administration could seek an emergency ruling from the Supreme Court.

The Fed is under relentless pressure from Trump to cut rates. The central bank has held rates steady since late 2024 over worries that the Trump administration’s unpredictable tariff policies will reignite inflation.

Last month, Fed Chair Jerome Powell signaled that Fed officials are increasingly concerned about weaker hiring, setting the stage for a rate cut next week. Most economists expect the Fed will cut its benchmark interest rate by a quarter-point to about 4.1%.

When the Fed reduces its key rate, it often, over time, lowers borrowing costs for mortgages, auto loans, and business loans. Some of those rates have already fallen in anticipation of cuts from the Fed.