The ruling came late Tuesday and preserves Cook's role at the central bank for now. But a swift appeal is expected
Alyssa Pointer/Bloomberg via Getty Images
A federal judge late Tuesday temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook.
The move preserves Cook’s seat on the central bank’s board, for the moment, and will allow Cook to participate in the Fed’s much-anticipated next policy meeting — taking place in just a few days’ time.
News of the firing came late last month, when Trump abruptly accused Cook of misrepresenting two houses as primary mortgages in 2021. The move to lower interest rates, and searching for “for cause” . Bill Pulte, the director of the Federal Housing Finance Agency, has in which he sought to remove real or perceived enemies on similar allegations of mortgage fraud.
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Cook, who has denied any wrongdoing, joined the Fed in 2022 after being nominated by President Joe Biden. Her lawyers say any errors were clerical and that the allegations are a pretext for Trump to install loyalists who will do his bidding, undermining the central bank’s historic independence from political interference.
U.S. District Judge Jia Cobb in Washington ruled that Cook can keep working while she fights the administration’s attempt to remove her.
In the ruling, Cobb concluded that the president had not shown “cause” for removal under the Federal Reserve Act. She emphasized that the statute is “best read” as limiting removal to misconduct or neglect of duty while in office, not to actions that took place before a governor’s appointment. Cobb also found that Cook was denied due process, because the administration did not provide her with adequate notice of the allegations before announcing her dismissal on social media.
Cook’s lawyer, Abbe Lowell, welcomed the ruling as a reaffirmation of the Fed’s independence. “Allowing the president to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law,” he said.
The Trump administration is expected to appeal quickly, and the case could ultimately reach the Supreme Court. White House spokesman Kush Desai said in a statement that the president had “lawfully removed Lisa Cook for cause” and that the ruling “will not be the last say on the matter.”
Cobb’s ruling and the expected appeal highlight the stakes of Trump’s bid to assert control over the central bank. By protecting Cook’s seat for now, the ruling preserves a slim majority of governors not appointed by Trump right as the Fed is set to convene one of its most-anticipated meetings in years. Prediction markets currently show a widespread expectation that the Fed will cut rates by 25 bps.
