Lawyers for Federal Reserve's Lisa Cook say White House hearing set up by Trump is 'biased'

The White House arranged an inquiry into Federal Reserve governor Lisa Cook after President Donald Trump accused her of mortgage fraud in 2021. Cook denies the accusation, and no criminal charges have been filed. The committee is intended to recommend whether there is legal cause to remove her from the Fed’s board.

The panel scheduled a hearing for Nov. 5. Cook’s lawyer, Abbe Lowell, said Cook would be performing official duties at financial and monetary policy meetings in Europe on that date. Lowell said the earliest she could appear would be after the Fed’s Dec. 8-9 policy meeting.

The dispute matters because the president has never previously fired a Fed governor. Cook’s lawyers say the committee is biased and that its process lacks clear information about additional allegations and evidence. The panel’s recommendation could become part of Trump’s renewed effort to remove Cook while the courts consider the boundaries of presidential power over the Fed.

The Federal Reserve Board of Governors is the group that helps direct the Federal Reserve, the United States’ central bank. Its governors participate in decisions about monetary policy and help oversee the institution. The board’s independence is intended to keep those decisions from being controlled by short-term political demands.

The article identifies the board as having seven members. Lisa Cook is one of those governors. Former President Joe Biden appointed her, and she became the first Black woman on the Fed’s board. Her position gives her a vote and voice in the central bank’s policy work.

Cook’s role makes the dispute especially significant. President Trump is trying to remove her, while also repeatedly urging the Fed to lower its key interest rate. The Supreme Court has allowed Cook to remain in office while litigation continues and indicated that Trump could try again if she receives adequate notice and an opportunity to respond.

The Federal Reserve Board of Governors has seven members. They form the board that helps lead the Federal Reserve and take part in its monetary-policy responsibilities. Lisa Cook is one of those seven governors, so an attempt to remove her would affect the board’s membership and its independence from presidential politics.

The White House committee investigating Cook has three members. They are Kevin Hassett, a top economic adviser to Trump; Labor Secretary Keith Sonderling; and Andrea Rich, chair of the Equal Employment Opportunity Commission. The White House says the committee will ultimately recommend whether there is cause to fire Cook.

The difference in scale does not make the committee unimportant. Its findings could support Trump’s effort to remove Cook under the law governing the Fed. Cook’s lawyers challenge the panel’s fairness, pointing out that one member has already said Trump has cause to fire her and that all three members are Trump appointees.

Cook’s lawyers argue that the inquiry committee cannot fairly judge her because its members appear aligned with President Trump. They say the panel is “demonstrably biased,” raising doubts about whether its recommendation would be independent. That matters because the committee is supposed to assess whether legal cause exists to remove a Federal Reserve governor.

Their strongest example involves Kevin Hassett, a top economic adviser to Trump. Hassett has already said that Trump has “cause” to fire Cook. The other members, Labor Secretary Keith Sonderling and Andrea Rich, chair of the Equal Employment Opportunity Commission, are also Trump appointees.

The lawyers also object to the procedure. They say the committee has not identified possible additional allegations, set a clear schedule for releasing evidence, or explained why any new evidence was not previously produced. In their view, a hearing under those conditions would not respect the Fed’s history or appearance of independence. They have not completely ruled out Cook appearing later.

When the law says a Federal Reserve governor may be removed only “for cause,” it means the president must point to a legitimate, legally sufficient reason. The president cannot remove a governor merely because of a policy disagreement or personal dissatisfaction. The article says the committee will recommend whether such cause exists.

Notice and an opportunity to respond are basic safeguards in that process. A governor must know the accusations and have a meaningful chance to answer them, challenge evidence, and explain relevant facts. The Supreme Court’s ruling suggested that Trump could try again to remove Cook if the administration provided those protections.

The safeguards are central to the current dispute. Cook’s lawyers say the committee has unspecified additional allegations and no clear timetable for sharing evidence. They also question why any new evidence was not produced earlier. The Supreme Court did not decide whether Cook’s alleged actions meet the “for cause” standard, leaving that issue unresolved.

No U.S. president has previously fired a Federal Reserve governor. The article connects that history to the Federal Reserve’s traditional independence from politics. That independence allows governors to make monetary-policy decisions without treating a president’s immediate political preferences as orders.

The current conflict tests that tradition. President Trump has repeatedly demanded that the central bank lower its key interest rate and has tried to remove Lisa Cook, whom former President Joe Biden appointed. Trump accuses Cook of mortgage fraud in 2021, before she joined the board. She denies the claim, and no criminal charges have been filed.

The administration has now created a committee to investigate Cook and recommend whether there is cause for removal. The Justice Department also previously sought to investigate then-Chair Jerome Powell over testimony about a building renovation, though that case was dropped. Economists cited in the article say such actions threaten the Fed’s independence, making Cook’s case a major institutional test.

Interest rates are a central tool of monetary policy. When political leaders pressure the Federal Reserve to cut rates, the central bank may face pressure to prioritize short-term political goals over its assessment of the economy. The article says Trump has repeatedly demanded a lower key interest rate and that economists view his actions as threats to Fed independence.

Lower rates can make borrowing cheaper and may encourage spending and investment. But if rates are changed without regard to economic conditions, inflationary pressure can increase; if rates stay too high, borrowing and growth can weaken. The key mechanism is confidence: households, businesses, and financial markets need to believe decisions follow evidence rather than political instructions.

The article does not report a specific economic result from Trump’s pressure. It does show an institutional risk. Attempts to fire Cook, along with the earlier investigation involving Jerome Powell, could make future policy decisions appear politically controlled. That perception could complicate the Fed’s work and make economic expectations less stable.