The Trump administration on Friday asserted vast powers to fire members of the Federal Reserve, as it urged a federal judge to reject a request by Lisa Cook, a Fed governor, to remain at the central bank while she contests the legality of her recent dismissal.
Lawyers for President Trump pressed their case over a roughly two-hour hearing that concluded with no immediate resolution. But the arguments framed the stakes in the emerging legal battle, which may determine the future of the Fed and its ability to set interest rates free from political meddling.
Lawyers for the Justice Department argued that federal law generally affords Mr. Trump great deference to determine the circumstances that would allow him to oust a Fed governor “for cause,” a term generally understood to mean professional neglect or wrongdoing. In the case of Ms. Cook, the president has accused her of mortgage fraud, an allegation that predates her Senate confirmation in 2022. Ms. Cook has not been charged with any crime or convicted of any wrongdoing.
“The president has a constitutional obligation to follow the law — doesn’t always mean it is subject to judicial review,” said Yaakov Roth, the Justice Department lawyer who represented Mr. Trump at Friday’s hearing.
In a filing on Friday, Mr. Trump’s lawyers asserted that the court should be “highly deferential” to the president and his interpretation of what qualifies as sufficient cause to remove a government official. Mr. Roth said that even if Ms. Cook made a mistake in filling out her mortgage forms, that would be considered “negligent and therefore itself grounds for removal.”
Ms. Cook’s lawyers on Friday sought to impress on Jia M. Cobb, a judge on the U.S. District Court for the District of Columbia, that the Fed governor did not have ample opportunity to respond to any of the claims. The accusations of wrongdoing were first levied on social media on Aug. 20 by Bill Pulte, the director of the Federal Housing Finance Agency, who called on Ms. Cook to resign. By Aug. 22, Mr. Trump said he would fire Ms. Cook if she did not step down. Three days after that, he sent a letter telling Ms. Cook she had been dismissed.