Trump faced lawsuit from Fed governor Lisa Cook over attempted termination

In a surprising turn of events, Lisa Cook, a governor on the Federal Reserve Board, has filed a lawsuit against President Donald Trump over her dismissal from the Fed. The lawsuit, filed in the U.S. District Court for the District of Columbia, claims that Trump's actions were part of an overtly political campaign to pressure the Fed into lowering interest rates.

The lawsuit describes Trump's actions as "unprecedented and illegal," and names the Fed's Board of Governors, its chair Jerome Powell, and President Trump as defendants. The lawsuit emphasizes the importance of a Fed that is insulated from the White House for a stable economy.

The lawsuit also alleges that Trump violated Cook's right to due process by not allowing her to review the evidence and respond to the claims formally. It argues that Trump's actions subvert the central bank's congressionally mandated protections as laid out in the Federal Reserve Act.

Bill Pulte, the federal housing director, claimed he had unearthed evidence showing that Cook wrongly identified two homes as her primary residence on mortgage applications before her appointment to the Fed. The White House spokesperson, Kush Desai, defended Trump's decision to fire Cook, citing "credible accusations of lying in financial documents" as the cause for dismissal.

The battle over Cook's position may proceed to the Supreme Court, as the White House is likely to appeal any ruling that allows Cook to remain in her job temporarily. The lawsuit asks the district court to allow Cook to continue serving at the Fed on a temporary basis while she contests the legality of her firing.

Meanwhile, President Trump has proposed Christopher Waller as the replacement candidate for the Federal Reserve Board of Governors position vacated by Lisa Cook. Trump is also exploring potential replacements for Adriana Kugler, another Fed governor, who announced her resignation, effective immediately, though her term does not end until January.

The lawsuit warns that a Fed setting policy based on ways to make the government's debt more manageable could lead to "economic collapse and hyperinflation." It underscores the need for the Fed to maintain its independence from political influence for the sake of economic stability.

The Justice Department has opened a criminal investigation into Pulte's accusations. The nomination of Stephen Miran, chair of the White House Council of Economic Advisers, requires Senate approval to replace Cook or Kugler on the Federal Reserve Board.

This development marks a significant moment in the ongoing relationship between the White House and the Federal Reserve, with implications for the nation's economic policy and the independence of the central bank.