'Where's the check?' Law professor reveals why Trump may get away with controversial move

26 August

President Donald Trump speaks during a rally, in Henderson, Nevada, U.S. October 31, 2024. REUTERS/Mike Blake TPX IMAGES OF THE DAY

In an unfolding clash between President Donald Trump and the independence of the Federal Reserve, legal experts and critics alike are voicing alarm over his attempted firing of Fed Governor Lisa Cook. They are suggesting that neither Congress nor the courts appear ready to step in.

Stanley Brand, a former House counsel and current professor at Penn State’s Dickinson Law School, told Politico, per a Tuesday report: “Congress is supine, and the courts are anxiety ridden."

“So, where’s the check? There isn’t any, right?” he added.

Trump’s decision to remove Cook, who was appointed by former President Joe Biden in 2022, confirmed by the U.S. Senate and would have served through 2038, marks an unprecedented push into the Fed’s traditionally autonomous domain. No previous president has ever fired a member of the Fed's board of governors.

The president justified his move by citing allegations of mortgage fraud stemming from two loan applications Cook allegedly submitted in 2021, each claiming a different property as her primary residence. She has so far not been charged with any crime.

Cook has strongly disputed the allegations and the legality of her removal. Through her attorney, Abbe Lowell, she stated, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties… as I have been doing since 2022."

Lowell added: “President Trump has no authority to remove Federal Reserve Governor Lisa Cook… 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.”

The Federal Reserve itself has underscored the legal protections of its members, reaffirming that governors can only be removed by the president “for cause,” and that these long tenures are “vital safeguards” for maintaining policy decisions rooted in data and the broader public interest.

Still, legal scholars believe Trump is wagering that the judiciary will not challenge his subjective determination of “cause.” Harvard Law professor Jack Goldsmith told Politico: “The firing of Lisa Cook ‘for cause’ may be pretextual, but is not obviously illegal."

The report noted that with the courts likely to avoid second-guessing a president’s judgment on such grounds, the battlefield shifts to political and market-based responses.

Jennifer Nou, a University of Chicago expert in administrative law, told Politico: “Given this judicial hesitancy, the question going forward will be the extent to which politics—and the markets—can serve as a meaningful check."

Markets responded with caution: stock futures dipped, Treasury yields rose and the dollar weakened. This reflected investors' concerns that this confrontation could erode the trust markets have previously had in the Fed’s independence.

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