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Fed Governor Lisa Cook’s lawyer says she’ll sue Trump to keep job

WASHINGTON (AP) — Federal Reserve Gov. Lisa Cook will sue President Donald Trump’s administration to try to prevent him from firing her, her lawyer said Tuesday.

The announcement makes it more likely that a high-stakes legal battle will ensue that will probably end up at the Supreme Court, and could redefine the limits of the president’s legal authority over the central bank. Increasingly at issue is the Fed’s independence from day-to-day politics, which most economists consider a key factor in keeping long-term inflation and interest rates low.

“President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” said Abbe Lowell, Cook’s lawyer and a longtime Washington figure who has represented prominent people from both major political parties. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action.”

Trump, meanwhile, underscored in remarks at the White House that his goal is to seize more power over the Fed to get it to lower interest rates. He has previously said he would only appoint people to the Fed’s board who will support lower borrowing costs.

“We’ll have a majority very shortly, so that’ll be good,” Trump said, referring to the Fed’s governing board. “Once we have a majority, housing will swing,” he added, blaming slow housing sales on high mortgage rates.

Trump has criticized Fed Chair Jerome Powell for months because the Fed has left its key short-term interest rate unchanged at about 4.3% — relatively high compared with its level during the COVID-19 pandemic, when it was nearly zero.

But now Trump has turned his attention to the broader Federal Reserve system. The committee that sets interest rates has 12 voting members, with seven coming from the board and the other five drawn from the presidents of the 12 regional Fed banks.

The Fed exercises expansive power over the U.S. economy by adjusting a short-term interest rate that can influence broader borrowing costs for things like mortgages, auto loans and business loans.

Also Tuesday, the Fed itself weighed in for the first time on the firing, saying it would “abide by any court decision.”

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