A federal judge has blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, ruling that she can remain in her post while her lawsuit challenging her firing proceeds.
U.S. District Judge Jia Cobb granted Cook’s request for a preliminary injunction late Tuesday, Sept. 9, concluding that she is likely to succeed on the merits of her case.
The ruling ensures Cook will be able to participate in the Federal Reserve’s upcoming September 16–17 meeting, when policymakers are expected to lower the central bank’s key short-term interest rate to between 4% and 4.25%.
Trump’s Attempt to Remove Cook
Trump announced on Aug. 25 that he was firing Cook following allegations from one of his appointees that she committed mortgage fraud prior to joining the Fed.
According to reports, Cook was accused of designating two properties in Ann Arbor, Michigan, and Atlanta, Georgia, as “primary residences” to obtain more favorable mortgage terms.
But Judge Cobb found that the allegations did not establish sufficient legal grounds. In her ruling, she wrote that removing a Federal Reserve Governor requires cause tied directly to their “ability to effectively and faithfully execute their statutory duties” while in office. Since Trump’s claims predated Cook’s tenure, the judge concluded they did not justify her removal.
Legal Limits on Presidential Power
By law, presidents may dismiss Federal Reserve governors only “for cause,” typically involving misconduct or failure to carry out official responsibilities. Legal experts note that disputes over monetary policy or unsubstantiated allegations fall outside that threshold.
The Associated Press reported that Cook has not been given any formal proceeding to answer the charges or present evidence, a key procedural step required in a valid for-cause removal.
If Trump were able to remove Cook, he could potentially reshape the balance of the Fed’s seven-member Board of Governors, creating a 4–3 majority in his favor.
Trump has already appointed two sitting governors and has nominated Stephen Miran, a White House economic adviser, to replace Adriana Kugler, who resigned unexpectedly on Aug. 1.
For now, Cook remains on the board, a victory both for her and for the independence of the central bank.
