A federal judge on Tuesday temporarily blocked President Trump from removing Lisa Cook from the Federal Reserve Board of Governors, allowing her to keep her seat while her lawsuit challenging the firing moves forward. The ruling comes just days before the Fed’s next policy meeting on Sept. 16–17.
Court Finds Cook Likely to Prevail
Judge Jia Cobb of Washington, D.C., said Cook is “substantially likely” to succeed on her claim that the removal violated the Federal Reserve Act, which only allows dismissals for cause. Cobb wrote that dismissal cannot be based on unproven conduct from before an official took office.
Cook’s lawyer, Abbe Lowell, said the decision “reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference.”
Allegations of Mortgage Fraud
Trump cited claims that Cook submitted false mortgage information, allegations first made public by Federal Housing Finance Agency Director Bill Pulte. The Justice Department has opened a criminal investigation, but Cook denies wrongdoing and says she was never given a chance to respond.
Her lawsuit argues Trump’s move was a pretext to open a Fed board seat for himself to fill. Cook’s lawyers warned that even a temporary removal would “crack the foundation” of the Fed’s independence.
Legal Battle With High Stakes
The case could head swiftly to the Supreme Court. Recent rulings have weakened job protections at independent agencies, though justices have suggested Fed officials may hold stronger safeguards.
Cobb, a Biden appointee, rejected the administration’s broader interpretation of what constitutes cause for removal, ruling that it must relate to a governor’s ability to perform their duties while in office. Cook, also appointed by Biden, is serving a term through 2038.
White House and Fed Response
A White House spokesman said the administration would appeal, calling the decision “not the last say on the matter.” Justice Department lawyers argued courts should defer to the president’s judgment on removals.
The Fed, named as a defendant alongside Trump, said it would abide by court orders but emphasized the uncertainty hanging over the central bank. Chairman Jerome Powell has not commented publicly on the dispute.
For more on the aftermath of Cook’s removal, stay tuned to Que Onda Magazine.