Federal Reserve Governor Lisa Cook’s attorney, Abbe Lowell, announced on Tuesday he is filing a lawsuit to challenge President Donald Trump’s attempt to fire her on Monday evening. “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,” he said in a statement sent to CNN. #CNN #News
00:00Does President Trump have legal cause to fire a member of the Fed's Board of Governors?
00:07Right now, we don't know.
00:09But the answer to that question will have major implications for the global economy.
00:14Today, an attorney for Fed Governor Lisa Cook announced a lawsuit challenging President Trump's attempt to fire her over allegations of mortgage fraud.
00:24In a statement, Cook said, quote, President Trump purported to fire me, quote, for cause when no cause exists under the law and he has no authority to do so.
00:35I will not resign, end quote.
00:38The Justice Department has said it plans to investigate the allegations, but Cook has not been charged and denies all wrongdoing.
00:45Still, this afternoon, President Trump insisted that even the appearance of potential fraud was enough to fire her.
00:56She seems to have had an infraction and she can't have an infraction, especially that infraction because she's in charge of, if you think about it, mortgages.
01:05And we need people that are 100 percent above board and it doesn't seem like she would.
01:10Just moments ago, the Federal Reserve acknowledged that Cook is challenging the president's firing.
01:18Here's the statement.
01:19A spokesperson said this, quote, long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis and the long term interests of the American people.
01:33As always, the Federal Reserve will abide by any court decision.
01:39Now, this is the first time in American history that a president has attempted to fire a Fed governor.
01:48And there's a reason for that.
01:49All around the world, governments, companies, banks, they expect the Fed's decisions about monetary policy to be, for the most part, if not entirely, non-political.
02:02But President Trump wants lower interest rates and he wants them yesterday, basically.
02:07He has spent months publicly insulting Fed Chair Jerome Powell.
02:11The firing of Cook marks a dramatic escalation in his attempt to assert control over yet another American institution.
02:19Look, the Federal Reserve, as it is, has historically been the best.
02:26And one of it is because it's independent.
02:29It's very difficult to try to get them to do something they shouldn't do.
02:33But if you think that you're going to wake up one day and discover that the Justice Department may or may not be indudited, it's highly embarrassing.
02:40Listen, it's terrible to find out that you might be charged by the Justice Department.
02:47But you don't know.
02:47But the president is taking swift action.
02:50It's very intimidating.
02:53Intimidating indeed.
02:54All right.
02:55My panel is here.
02:56They're going to join in just a moment.
02:57We're going to start with CNN's Jeff Zeleny, who's outside the White House.
03:00CNN's Phil Mattingly, who is here for us in the D.C. Bureau.
03:03And, Jeff, let me start with you, because, of course, we were listening to – it was a lengthy, shall we say, cabinet meeting.
03:10What more are we hearing – what more is he saying about the decision to fire Lisa Cook, or try, I should say?
03:16Three hours and 17 minutes, as the clock goes, one of the longest, at least, public sessions of a cabinet meeting.
03:23But it was the comments about Lisa Cook that certainly caught our attention.
03:27Look, her term was expected to go until 2038.
03:31She was, of course, nominated by President Biden, confirmed by the Senate.
03:36It was a 50-50 vote.
03:37Vice President Harris had to break the high back in 2022.
03:41But her term is just getting started.
03:44But President Trump clearly has been making many moves to take control of the Fed, obviously blasting Jerome Powell at every turn, calling him too late.
03:54He's accusing him of being too late in lowering interest rates.
03:57Well, clearly, the president and the White House have been making steps to try and exert their control really throughout the government.
04:04But the Federal Reserve is a different matter, because, of course, it's the essential bank, but it's also independent.
04:10A U.S. president has never removed a governor on the Federal Reserve before.
04:16So this is certainly entering new legal territory.
04:20And it looks like it will go, obviously, through the courts, likely to the Supreme Court.
04:25And the question now is what happens between now and then.
04:29The president said he's firing her for a cause, citing mortgage fraud.
04:34Of course, that is unproven.
04:35No crime has been charged or convicted or proved to be committed.
04:40The Department of Justice is apparently investigating, but it's about what happens in the interim.
04:46The Fed is meeting for the next meeting in mid-September.
04:50Will the White House try and seat someone else?
04:52Officials are not telling us exactly what the president's plans are as this is a litigated.
04:56But, Casey, there is no doubt about it.
04:58The bottom line, the president wants to control the Fed.
05:00All right.
05:02So, Phil Mattingly, help us understand exactly what this means.
05:08I mean, you noticed when you were watching this, I presume you watched all three hours
05:12and 17 minutes of this cabinet meeting.
05:14Correct me if I'm wrong.
05:16But you seem to notice a sort of caution that the president was using when he was talking
05:21about his authority here.
05:22Yeah, the reason this stood out to me is I did watch all three hours and 17 minutes.
05:28And the only thing that the president wasn't expansive on in his commentary was Lisa Cook
05:34and his decision to attempt to fire her, to move to fire her last night.
05:39And that caution, and especially paired with the very cautiously and legalistic way the letter
05:47that he sent or posted on Truth Social last night at 8 p.m., to Jeff's point, the sheer
05:53lack of information about next steps, how this moves forward from people around the administration,
05:58inside the administration, underscores the reality of this moment.
06:03While the president and his team may believe that they have this authority, as kind of up
06:07in the air as that is, and questioned by legal experts that it is, there is no precedent
06:12for this.
06:13There is no roadmap for this.
06:14Nobody's totally sure how this moves forward.
06:16What we are sure of, though, is while this is based on what the president referred to
06:21as an infraction, not saying it was mortgage fraud like some of his advisors, it is clear
06:26what he wants from it.
06:28And he actually laid it out, talking about one existing opening on the Fed board and a potential
06:32second.
06:33Listen.
06:35We just put a very good man in one position.
06:40We might switch him to the other.
06:43It's a longer term and pick somebody else.
06:45But we're very happy with the person we have in there.
06:48And we'll have a majority very shortly.
06:50So that'll be great.
06:51Once we have a majority, housing is going to swing and it's going to be great.
06:56People are paying too high an interest rate.
06:59That's the only problem with housing.
07:00Casey, I just point that out because I think it's really important to keep that in mind.
07:06There is a lot of unknowns and a huge number of questions and a very intensive debate and
07:10political fight ahead.
07:11The goal here, without any question at all, is to seize a majority of the Federal Reserve
07:16Board.
07:16And that's exactly what the president just said.
07:17Indeed.
07:19All right.
07:20Phil Mattingly, Jeff Seleney, thank you both very much.
07:22Really appreciate you starting us off.
07:23All right.
07:24Our panel is here.
07:25U.S. Economy Government Managing Editor at Bloomberg News, Mario Parker, the host of
07:28the Chuck Toddcast.
07:29Chuck Todd, CNN political commentator, former Biden White House Communications Director,
07:33Kate Bedingfield, and CNN senior political commentator, Scott Jennings.
07:36Welcome to all of you.
07:37Thank you all very much for being here.
07:39Chuck Todd, this is, in a big picture way, you know, there are so many things about Donald
07:47Trump and his presidencies that we call unprecedented.
07:51This is something that has quite literally, no one has ever tried to do this before.
07:55The Federal Reserve has been, as Jim Cramer was basically outlining, the best of the best
08:01for the foundation, the underpinnings of our global financial system for decades.
08:04What do you think this all means, big picture?
08:07Well, this is a real danger to the economy.
08:08The last time a president had this kind of, when you have political control over the Fed,
08:13you get terrible outcomes.
08:15When Richard Nixon basically coerced Arthur Burns into terrible decisions.
08:19This is why we invite you.
08:20I understand that.
08:20This goes way back.
08:22We had a decade of stagflation because he wanted lower interest rates and it created a
08:26problem.
08:28Someone at my house is reading a biography of J.P. Morgan, by the way, and something similar
08:31happened in that era as well, but continue.
08:33And I do think what's happening here is that Lisa Cook is essentially a stand-in for Jay
08:37Powell, right, which is, this is, I think, Trump, the administration and the White House
08:41basically testing the electric fence, right?
08:44Do they have the authority to do this?
08:46I think that is why the cautious words are being used because, first of all, some lawyer,
08:50at least somebody got to the president and said, hey, be careful.
08:53Whatever you say actually could get used in her lawsuit challenging your ability to do
08:58this, number one.
08:59But the Supreme Court warned, has already warned, that the Fed was a different category here
09:05when it sort of gave him some authority at some of these executive agencies that he has
09:10had authority over.
09:11And so I just think this is a test case.
09:15And they decided it's better to test the case, that the markets won't punish him, right?
09:21If he tried to do this with Powell, the markets would crater.
09:23The world markets would crater, the economic, the, but doing it with picking on one governor
09:29to sort of, you're testing to see, do I have this authority or not?
09:33I'm going to, the least damaging attempt to do.
09:35I mean, it's pretty classic Trump, right?
09:37Push the envelope and see how far it'll go.
09:39Pick on somebody nobody's ever heard of so that you can essentially shape the narrative
09:45of who she is or try to shape, you know, look, she's got no due process here.
09:49I mean, I assume, I don't want to assume anything with our courts today, but I assume he loses
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