Federal Reserve Power Struggle: Governor Cook's Legal Battle

Federal Reserve Governor Lisa Cook, targeted for removal by President Donald Trump due to alleged mortgage misstatements, is set to seek judicial approval to retain her role at the U.S. central bank, a Fed press release disclosed on Tuesday.

Despite Trump's announcement on Monday that Cook's termination was "effective immediately," the Fed's statement suggests that, unless a court rules otherwise, her position as a governor remains intact. Her lawyer, Abbe Lowell, intends to initiate legal proceedings to contest Trump's decision, with the Justice Department having not taken any steps against her.

The Federal Reserve Act outlines 14-year terms for governors with dismissal by the president permissible solely for "cause." A Fed spokesperson highlighted the importance of these provisions in safeguarding data-driven monetary policy decisions. The forthcoming Fed meeting on September 16-17 could see Cook's involvement hinge on subsequent legal determinations.

(With inputs from agencies.)