Newsweek: Trump’s Fed Firing Must Fail, For All Our Sakes
Newsweek
Trump’s Fed Firing Must Fail, For All Our Sakes | Opinion
Thomas Moukawsher
Published
Sep 02, 2025 at 03:07 PM EDT
The Federal Reserve manages interest rates for borrowing money in America. If it’s too easy to borrow, you get higher prices at the supermarket. If it’s too difficult to borrow, people lose their jobs. Congress wanted the people setting those rates to be free from political pressure.
But now President Donald Trump wants to destroy the Fed’s independence and take personal control over the flow of money in America. To do it, he is plotting to seize control over the board of governors that controls the Fed.
His opening move has been the firing of Fed Governor Lisa Cook. Trump has bluntly and publicly asserted that he can fire even Fed Chairman Jerome Powell merely for disagreeing with him about interest rates. But the Supreme Court in a recent order suggested he can’t. So, Trump had to find an excuse to get rid of the Fed governors standing in his way.
He found one in a mortgage application. Trump claims Lisa Cook committed mortgage fraud by saying in two different mortgage applications that two different homes were both her “principal residence,” the home that lenders usually allow borrowers to finance on more favorable terms. Maybe Cook did wrong, but Trump didn’t even let her respond to the charge, so we don’t know if she has a defense. But her guilt isn’t the point.
Trump was looking for something—anything—he could say was “cause” to fire Cook because federal law makes that the only way a president can remove a Fed governor. But if “cause” can mean anything the president wants then, legally speaking, the statute should have simply left the word “cause” out and said that the governors serve unless “removed” by the president.
It will be for the courts to give life to that key word, “cause.” Knowing it can’t be meaningless, the courts should make sure that their interpretation of the word “cause” does something more than allow the president to do indirectly something he can’t do directly—fire a fed governor for disagreeing with him about how to set interest rates.
Trump’s desire to personally control the rates is the real motive behind firing Cook, and courts look for real motives all the time. In employment discrimination cases, employers don’t send emails to employees saying: “You are hereby fired because you are a woman.” If an employer wants to fire someone because they’re a woman, they say things like: “Your department is being reorganized,” “We have been disappointed with your sales figures,” and things of that nature. When this sort of explanation is merely an excuse for gender discrimination, courts ferret out the real reason and punish the culprit.
But Lisa Cook should beware. Some judges are sure to say there is no practical way to examine the real reason for the president’s decision; that they can’t second-guess him about what “cause” is, or that Cook should have taken her claim elsewhere or written it differently or some other nonsense.
This is especially likely when the decision reaches the Supreme Court. If the Court’s recent ruling about the president’s power to cancel congressionally-mandated spending is any guide, Lisa Cook has much to worry about. It was obvious in that case that Trump had broken the law—Congress controls the purse strings, not the president.
But Trump won that ruling because the Court got sidetracked by the procedural question of whether the lawsuit should have been filed in the Court of Federal Claims instead of the U.S. District Court. Had Justice Amy Coney Barrett only sided with Chief Justice John Roberts and the courts three liberal justices, we might have gotten a real ruling, but instead she took a puzzling middle position that looked like a spoof of how fussy and unproductive courts can be. The result was that the cuts remain and the parties who sought help from the courts are ruined.
Will we see a repeat performance over the Fed firing? Will the Court tangle the case into knots or neuter the word “cause” by deferring to the president’s judgment?
This time the Court should defend the law rather than torture it. It suggested it might stand up for the legally-mandated independence of the Fed. If it doesn’t, we risk the total politicization of the American economy and the fatal instability that might follow.
Thomas G. Moukawsher is a former Connecticut complex litigation judge and a former co-chair of the American Bar Association Committee on Employee Benefits. He is the author of the book, The Common Flaw: Needless Complexity in the Courts and 50 Ways to Reduce It.