I do want to talk not so much about the
veracity of the claims against Lisa
Cook, but more about the veracity of
whether there is indeed cause for the
president to remove her. Yeah. And
that's the main legal issue here because
the Federal Reserve Act says that the
president can remove a Federal Reserve
Board governor for cause, but the
statute doesn't define or specify what
cause means. So we have to look to some
other statutes for other agencies that
say cause generally means some sort of
inefficiency, neglect or malfeasance.
The question here is whether the
allegations against Fed Governor Lisa
Cook, you know, rise to that level. And
my feeling is that until you have some
sort of investigation by, let's say, the
Fed Inspector General or some sort of
investigation by the Justice Department
that results in charges, it's probably a
little premature to say that the
allegations alone satisfy the four cause
standard.
>> We should mention uh that the Federal
Reserve, according to a statement issued
by the central bank, said it will abide
by any court decision as this will
likely be resolved legally. And that's
kind of where I want to go to next,
Elliot, because Lisa Cook's lawyer has
made clear that they will file a lawsuit
challenging this firing. Tell us a
little bit about Abby Lowel because he's
a high-profile white collar defense and
trial lawyer known as a top scandal
specialist. And I bring this up because
he has a long history of working both
with Democrats and Republicans. He
represented uh both uh children of
Donald Trump and Joe Biden uh Ivanka and
Jared and defended Hunter uh in his gun
gun charges trial. So, is that proximity
with all the principles Elliot going to
be a good thing or a bad thing? Will it
work for him or against him? And will it
work for Lisa Cook or against Lisa Cook?
>> Well, I I think courts will look at the
merits of the argument, they won't
necessarily look at Abby Lel's uh
bipartisan history of representation.
although he is a highly respected lawyer
as you've pointed out with his
credentials. So courts will take his
arguments very seriously but at the end
of the day they'll look at you know the
actual arguments that he's making and
whether those pass muster. It's not a
surprise uh that Lisa Cook is expected
to file a lawsuit. That's what we've
been expecting since we saw the news
last night that she's being fired. And
like we said the main arguments will be
whether uh the president has satisfied
the four cause standard. And then
another key issue that is probably going
to be the main battle early on is
whether she continues to serve on the
Federal Reserve Board while the
litigation plays out.
>> And that is a big uh question mark going
forward. Elliot, I do just want to
return to those headlines that Scarlet
was reading out. Some additional
headlines coming out of an official
statement from the Federal Reserve
saying that it reaffirms its commitment
to transparency and that the removal
protections serve in their words as a
safeguard saying that governors may only
be removed for cause and as this goes to
the courts assuming that is where we are
going next. Elliot I am curious just
about the state of the board of
governors overall during this process
whether Lisa Cook is there or still
there during this litigation. Do you
have any sort of confidence that they
will be able to function in a way that
is appropriate with their mandate?
>> Yeah, I think they'll be able to
continue to function. She she's only uh
one person on the board. The board is
comprised of uh seven governors,
although one one of the seats is in flux
because Aviana Cooler uh resigned
earlier in August and the nominee to
fill her seat, Steven Moran, has not
been confirmed yet. But I think the
bigger picture here is um from President
Trump's perspective, this is likely a
play to control the Federal Open Markets
Committee, the FOMC, because that's
really the body that controls interest
rates, which President Trump wants
lowered. And what's interesting is this
coming February, the Federal Reserve
Board will have the opportunity to uh
confirm or to bar the reappoint of the
regional reserve bank presidents who
serve on the FOMC. in addition to the
Federal Reserve Board governors. And I
think that's what President Trump is
trying to control because if he removes
Lisa Cook, you sort of have a 33
deadlock balance on the Federal Reserve
board. And as a result, you may not see
some of these Reserve Bank presidents
reappointed.