Lisa Cook’s Fed Tenure Is Safe Until at Least January

President Donald Trump’s efforts to remove Lisa Cook from the Federal Reserve Board were stymied once again as the U.S. Supreme Court announced it would hear oral arguments in the case in January, leaving Cook in place until at least then.

While the president and the commercial real estate industry share overlapping goals in the desire for lower interest rates, many in the industry carry reservations about the possible loss of independence for the Fed.

Cook was appointed to the board in 2022 by President Joe Biden, and reappointed in late 2023 for a term that allows her to serve until 2038.  

When Trump announced Cook’s firing this past August, he became the first U.S. president in the 111-year history of the Fed to attempt to remove a sitting Fed governor, according to The New York Times. 

Within weeks of the announcement, Cook filed a lawsuit against the president, the Federal Reserve Board and its chairman, Jerome Powell — who Trump has also been hoping to remove — and secured a preliminary injunction keeping her in place at the Fed for now. 

Cook also released a statement saying that, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.”

Speaking to the Supreme Court, Cook’s legal team warned that allowing the president to fire a sitting governor while a lawsuit about the firing was ongoing would lead to “economic turmoil and undermine public confidence in the Fed,” said The Times.

The Trump administration took action against Cook after Bill Pulte, the director of the Federal Housing Finance Agency, claimed that Cook cited two separate Michigan homes as her main residence in 2021, as Commercial Observer previously reported.

CO noted at the time that the markets reacted harshly to news of Cook’s firing, with Dow futures, S&P 500 futures and Nasdaq 100 futures all “plummeting,” although the market was “largely unchanged by late morning after opening.” CO asserted that commercial real estate industry figures are “concerned about future central bank decisions driving up inflation from pressures to lower interest rates.”

Nigel Green, CEO of international financial consultancy deVere Group, released a statement at the time saying, “Trump’s decision to remove a sitting Fed governor has shaken confidence in the institution that underpins the world’s financial system,” CO reported.

“Even absent overt interference, if markets perceive that future appointees are responsive to short-term electoral priorities, confidence in the Fed’s inflation-targeting credibility could erode,” Sam Chandan, the founding director of the Chen Institute for Global Real Estate Finance at New York University’s Stern School of Business, told CO, citing a “meaningful risk that monetary policy will be second-guessed by investors, complicating the Fed’s role as an anchor of macroeconomic stability.”    

CO also noted at the time that while the legality of Cook’s firing will likely be decided by the federal courts, “the symbolism of a sitting president seeking to axe someone on the central bank could have lasting effects for market players who count on the Fed to set fiscal policy without White House interference, particularly in CRE.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.