The ruling allows Cook to participate in next week’s widely-awaited meeting of the Federal Open Market Committee, which is the rate-setting committee of the central bank.
President Donald Trump’s attempts to remove Federal Reserve Bank (FRB) Governor Lisa Cook, alleging mortgage fraud, faced a setback as a federal court judge temporarily stayed the move.
The court declined the government’s request to stay its decision pending any approval, Cobb said in a 49-page ruling. “The public interest in this case is not only limited to the interests of the Executive Branch. There is a substantial public interest in having governmental actors like the President abide by the federal laws.”
“The Court recognizes that this case involves the first ‘for cause’ removal of a Federal Reserve Board Governor, and as a result, raises important matters of first impression. However, for the reasons stated in this opinion, the Court finds that the balance of equities would not be in the Government’s favor,” the ruling read.
The ruling allows Cook to participate in next week’s widely-awaited meeting of the Federal Open Market Committee (FOMC), which is the rate-setting committee of the central bank. The stock market has baked in an interest rate cut at the meeting, with the broader S&P 500 trading shy of its all-time high and the tech-heavy Nasdaq Composite at a record.
The SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ), exchange-traded funds (ETF) that track the S&P 500 Index and the Nasdaq 100 Index, have gained 11.63% and 13.85%, respectively, for the year.
On Stocktwits, retail sentiment toward the SPY ETF was ‘bullish’ (56/100) as of late Tuesday, while that toward the QQQ ETF was ‘bearish’ (21/100). The message volume on both streams remained ‘normal.’
At the July FOMC meeting, Fed Governors Christopher Waller and Michelle Bowman dissented, favoring a rate cut over the central bank’s status quo stance. The 7-member board is depleted following the resignation of Adriana Kugler in early August. Trump’s nominee, Stephen Miran, attended the Senate Banking Committee hearing last week and is widely expected to be confirmed.
Tuesday’s ruling was in response to a petition filed by the Department of Justice (DoJ), which alleged that Cook had listed two of her properties, an Atlanta condominium and a Michigan home, as her primary residence in 2021 to obtain favorable mortgage terms.
The DoJ’s move followed the Federal Housing Finance Agency’s Bill Pulte, making a criminal referral to the agency, and Trump’s attempt to fire the Fed official. Cook subsequently filed a lawsuit, asking the court to declare the president’s firing order as “unlawful and void.” She added Powell as a defendant in the lawsuit.
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