A Federal Court of Appeals from the United States ruled on Monday (15) that President Donald Trump cannot dismiss Federal Reserve (Fed) leader Lisa Cook before the meeting of the Federal Market Committee (FOMC), scheduled for this week. The decision ensures that Cook participates in the two -day meeting in which the possibility of reducing the interest rate will be discussed.
Trump’s defense had been emerging, the suspension of the decision of a lower court that had already barred the dismissal. However, the judges of the Columbia District Court of Appeals understood that the government’s arguments did not meet legal requirements to authorize the immediate removal of Cook.
Trump had announced in August the intention to dismiss the governor “for just cause”, alleging alleged involvement in mortgage fraud. The measure, considered unprecedented, was contested by Cook herself, who filed an action to prevent the dismissal and denied any irregularity.
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Two of the three panel magistrates-both nominated by former President Joe Biden-voted against Trump’s request and stressed that the first instance decision was correct by pointing out possible violation of the proceedings of the Constitution. The third judge, appointed by Trump, diverged and argued that dismissal could be effective.
The dispute rekindles the debate on the independence of the Central Bank. The Republican President had already pressured the Fed on several occasions to cut interest and even considered the removal of Jerome Powell, the institution’s current Chair. The maintenance of cook in office ensures another vote aligned with Powell in monetary policy decisions.
