June 29 (Reuters) – Federal Reserve Director Lisa Cook said the United States Supreme Court’s decision on Monday to block President Donald Trump’s attempt to fire her protected the central bank’s independence.
The 5-4 decision by the nation’s highest court “recognizes that the independence of the Federal Reserve is essential to fulfilling Congress’s mandate of price stability and full employment,” Cook said in a statement.
Trump’s action “was an attempt to remove me under a made-up pretext because I refused to give in to political pressure and continued to set the interest rate based solely on what would best serve the American people,” she said.
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“I am grateful for this decision, not for myself, but for the American people, whose economic well-being depends on a central bank that fulfills its mission, and does not bow to political intimidation,” Cook said.
The Supreme Court stated in its decision that Fed officials do not perform their duties according to the president’s wishes and that Trump’s attempt to remove Cook from the central bank did not guarantee him due legal process.
Fed directors, who are selected by the president and confirmed to their positions by the Senate, serve fixed terms designed to insulate them from the political process so they can better set monetary policy. It is widely accepted that central banks that operate independently achieve better economic results.
Trump attempted to fire Cook, the first Black woman to serve as Fed director, based on allegations of mortgage fraud that many observers called unfounded. The Supreme Court’s decision prevents Trump from firing Cook while she challenges the president’s action against her in court.
Since resuming office, Trump has exerted considerable pressure on the Fed to reduce interest rates, despite this measure conflicting with the central bank’s mission to bring high levels of inflation back to the 2% target.
Trump’s Justice Department also launched an unprecedented investigation into the central bank and its then-chair, Jerome Powell, for cost overruns at the Fed’s headquarters in Washington. Powell, who remains Fed director, argued that the attack was retaliation for not following the president’s orders on interest rates. This investigation against the central bank is effectively closed.
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Cook’s legal team said in a statement that “making unproven claims of mortgage fraud to justify a power grab has become a pattern of the Trump administration, but today the Supreme Court said no.”
Trump said in a post on his Truth Social platform that he has not yet closed the matter with Cook. “We will take appropriate action immediately to ensure that someone who committed wrongdoing does not make vital decisions regarding the well-being of the United States of America!” he wrote.
