US Judge Blocks Donald Trump’s Attempt to Remove Fed Governor Lisa Cook

A federal judge temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, dealing an early setback to the White House in an unprecedented legal fight that could reshape the central bank’s independence.

 

US District Judge Jia Cobb in Washington, D.C., issued a preliminary ruling finding that the Trump administration’s allegations -- that Cook committed mortgage fraud before taking office -- were likely insufficient grounds for her removal. Cook has denied any wrongdoing.

 

“President Trump has not identified anything related to Cook’s conduct or job performance as a Board member that would indicate that she is harming the Board or the public interest by executing her duties unfaithfully or ineffectively,” Judge Cobb wrote.

 

Trump moved to fire Cook in late August, but the Fed has said she remains in her post. The ruling prevents the Fed from carrying out her dismissal while the lawsuit proceeds.

 

The case is expected to reach the US Supreme Court and could determine how far presidents can go in challenging the Fed’s autonomy, a principle seen as vital to controlling inflation and shielding monetary policy from politics.

 

Trump has repeatedly demanded steep rate cuts, sharply criticizing Fed Chair Jerome Powell’s leadership. The central bank is expected to lower rates at its September 16–17 policy meeting.

 

The White House declined immediate comment, and Trump did not respond to questions about the ruling. Cook’s attorney, Abbe Lowell, hailed the decision: “This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference.”

 

By law, Fed governors may be removed only “for cause,” though the statute does not define the term or set removal procedures. No president has ever removed a Fed governor, and the provision has never before been tested in court.

 

Cobb said the “best reading” of the law is that removal can only be based on misconduct in office. The mortgage fraud allegations against Cook involve property applications filed before her Senate confirmation in 2022.

 

Trump and William Pulte, the Federal Housing and Finance Authority director he appointed, accuse Cook of misrepresenting information on mortgage applications for three properties, which allegedly allowed her to secure lower interest rates and tax credits.

 

The US Justice Department has opened a criminal probe into the matter and issued grand jury subpoenas in Georgia and Michigan, according to documents seen by Reuters and a source familiar with the case.

 

Cook, the first Black woman to serve as a Fed governor, has sued Trump and the Fed, arguing that the claims are a pretext for firing her over her monetary policy views. Even if the allegations were true, she says, they predate her appointment and cannot be grounds for removal.

 

The Trump administration, however, argues that presidents have broad discretion to decide when a Fed governor must be removed, and that courts lack the authority to intervene.