US Fed’s Cook denies wrongdoing as Trump renews bid to fire her

In a letter sent to the White House on Wednesday (Aug 26), Federal Reserve Governor Lisa Cook's lawyers vehemently denied the unproven mortgage fraud allegations repeatedly made by President Donald Trump. Cook's lawyers stated that "Governor Cook has never committed mortgage fraud or any intentional wrongdoing, and there is no legally cognisable cause for removing her from the Federal Reserve Board."

The White House did not have an immediate comment on Cook’s letter. This latest dispute follows Trump's earlier failed attempt at the Supreme Court to remove Cook, which was part of a broader effort to appoint members aligned with him for lowering interest rates. Cook has not faced criminal charges to date. The White House personnel director Dan Scavino earlier this month reiterated the fraud allegations made more than a year ago by Bill Pulte, director of the Federal Housing Finance Agency.

Cook had previously rebutted those claims in a detailed letter to Justice Department officials in the fall. The Fed is set to hold its next scheduled policy meeting on Sept 15-16, with officials divided on whether to maintain or raise rates to combat high inflation. Cook voted with the majority to keep the benchmark rate unchanged but expressed readiness to act if inflation fails to cool.

She was appointed to the Fed in 2022 by former President Joe Biden, with her term set to conclude in 2038. In a June 5 decision, the Supreme Court ruled that Trump could not immediately fire Cook due to insufficient notice and the opportunity to respond. The justices' majority opinion defended the US law protecting Fed governors from political interference, stating that only "for cause" removals were permissible.

However, the high court did not provide a detailed definition of "cause," leaving the door open for Trump to attempt another removal if he could provide a chance for Cook to defend herself.