Trump’s DOJ: Removing Lisa Cook from Fed Won’t Trigger Market Crisis

Donald Trump’s Department of Justice told the Supreme Court that removing Fed Governor Lisa Cook will not cause a financial market disaster. Solicitor General D. John Sauer argued that Trump has the legal authority to fire her immediately, even while her lawsuit is ongoing.

Trump dismissed Cook in late August, citing possible mortgage fraud tied to two properties she listed as primary residences in 2021. The situation mirrors Treasury Secretary Scott Bessent’s 2007 filings, which raised no legal concerns despite showing two primary homes.

Cook has denied the allegations, calling them politically motivated attacks aimed at undermining the Fed’s independence. Her legal team pointed to the Federal Reserve Act’s “for cause” removal standard, arguing that pre-appointment mortgage issues don’t meet that threshold.

Trump’s team countered that “newly detected fraudsters” should not remain on the Board simply because misconduct occurred before their appointment. Sauer stressed there is no reason markets should panic over pre-appointment issues but remain calm over in-office violations.

The dispute comes as Trump increases pressure on the Fed to accelerate rate cuts. Meanwhile, the DOJ has asked the Supreme Court to allow Cook’s ouster to take immediate effect.

At stake is more than Lisa Cook’s career — the case could reshape the balance between the Federal Reserve’s independence and presidential power.