Federal court blocks Trump’s bid to remove Lisa Cook from Fed board | The Australian
A federal appeals court has ruled that President Trump cannot remove Federal Reserve Governor Lisa Cook—for the time being.
On Monday, the D.C. Circuit Court of Appeals rejected the Trump administration’s emergency request to oust Cook, who was reinstated to her position by a lower court. The decision means Cook will remain on the Fed’s powerful seven-member Board of Governors, at least through this week’s critical two-day meeting where interest rate cuts are on the table.
The ruling was split 2-1. Judges Bradley Garcia and Michelle Childs sided with Cook, saying she likely has a strong case that her due process rights were violated. Judge Gregory Katsas dissented.
Why Trump Wants Cook Out
Last month, Trump announced he was firing Cook, accusing her of mortgage fraud tied to loan documents filed in 2021—before she joined the Fed. The allegations came from Bill Pulte, Trump’s appointee to lead the Federal Housing Finance Agency. Cook has strongly denied wrongdoing, and her lawyers say she may have made an error on a form but never committed fraud.
District Judge Jia Cobb had already ruled that Trump likely lacked the legal authority to fire her. Under the Federal Reserve Act, a president can only remove a Fed governor “for cause,” which typically means misconduct while in office. Since the mortgage allegations predate Cook’s tenure, the judge found Trump had no valid grounds for dismissal.
What’s Next
The Trump administration is expected to appeal to the Supreme Court. If the high court sides with Trump, he could replace Cook and gain majority control over the Fed’s board. That would be historic—no president has ever successfully removed a Fed governor in the institution’s 112-year history.
Cook, who was appointed by President Biden to a 14-year term ending in 2038, argues Trump’s move is political. Her legal team says the allegations are just a cover for her refusal to back Trump’s push for faster interest rate cuts.
Meanwhile, critics warn that allowing presidents to fire Fed governors at will could undermine the Fed’s independence and shake investor confidence in the U.S. economy.
For now, Cook keeps her seat at the table—and all eyes are on the Supreme Court for what happens next.
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