A US federal judge on Tuesday temporarily blocked President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook, as she challenges her ouster from the central bank in court.
Judge Jia Cobb granted Cook’s request for a preliminary injunction, allowing her to remain on the Fed’s Board of Governors while her lawsuit proceeds. The decision comes just one week ahead of a highly anticipated Federal Reserve interest rate meeting.
In her ruling, Judge Cobb found that Cook was “substantially likely” to prevail on key claims, including her argument that the president’s actions violated the Federal Reserve Act, which stipulates that board members can only be removed “for cause.”
“The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” Cobb wrote.
President Trump declined to comment on the ruling when asked by a reporter Tuesday night as he left a restaurant in Washington.
Cook’s attorney, Abbe David Lowell, welcomed the decision, calling it a strong affirmation of the Fed’s independence.
“This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Lowell said in a statement. “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.”
The Supreme Court recently indicated in a separate case that members of independent agencies such as the Fed may only be removed “for cause,” which has traditionally been interpreted to mean misconduct or neglect of duty.
Judge Cobb emphasized that Cook’s removal attempt is unprecedented, noting that this is the first such case in the Federal Reserve’s 111-year history. She also cast doubt on the nature of the Trump administration’s allegations.
“‘For cause’ does not contemplate removing an individual purely for conduct that occurred before they began in office,” Cobb wrote.
Trump’s move to dismiss Cook represents a sharp escalation in his ongoing efforts to assert control over the central bank. He has repeatedly criticized the Fed for not cutting interest rates fast enough and has mocked Fed Chair Jerome Powell as “Mr. Too Late.”
Fed policymakers have taken a more cautious approach, balancing inflation concerns with the broader economic impact of Trump’s trade and tariff policies.
Trump recently announced Cook’s removal on social media, citing allegations of mortgage fraud. Specifically, Cook is accused of claiming two separate primary residences — one in Michigan and another in Georgia — in 2021, which could have allowed her to secure favorable mortgage terms. She has denied any wrongdoing.
Cook made history in 2022 as the first Black woman appointed to the Federal Reserve Board.
AFP
