A federal appeals court has blocked President Donald Trump's attempt to remove Federal Reserve Governor Lisa Cook, ensuring her participation in the central bank’s upcoming policy meeting expected to lower interest rates.
The decision marks a significant moment in the ongoing debate over the Fed’s autonomy from political influence.
The court upheld a September 9 ruling by U.S. District Judge Jia Cobb, who found that Trump’s allegations of mortgage fraud by Cook, which she denies, likely do not justify removal under the Federal Reserve Act.
Circuit Judges Bradley Garcia and J. Michelle Childs, both Biden appointees, stated that Cook’s due process claim is likely valid, as she received no meaningful notice or chance to respond.
The White House, through spokesman Kush Desai, vowed to appeal, stating:
The President lawfully removed Lisa Cook for cause. The Administration will appeal this decision and looks forward to ultimate victory on the issue.
The case tests the Federal Reserve Act’s provision allowing governor removal only "for cause," a term undefined and untested in court, designed to protect the Fed from political interference.
No president has ever removed a Fed governor since the bank’s 1913 founding, and the ruling ensures Cook’s attendance at the Tuesday and Wednesday meeting, where a rate cut is anticipated to bolster a weakening labor market.
Trump has pushed for aggressive rate reductions, criticizing Fed Chair Jerome Powell, while the Senate confirmed his nominee Stephen Miran to a Fed board seat in a 48-47 vote.
A separate Justice Department probe into Cook’s mortgage allegations continues, though property records may undermine the claims, highlighting the broader stakes for central bank independence.