A federal judge has temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, granting a significant reprieve to the economist as she challenges the president’s attempt to oust her over mortgage fraud allegations.
U.S. District Judge Jia Cobb in Washington ruled in favor of Cook, allowing her to remain in her position while the legal dispute proceeds. The decision ensures that Cook can likely participate in the highly anticipated Federal Reserve policy meeting scheduled for September 16–17, where she would cast her vote on potential changes to interest rates.
In her ruling, Judge Cobb found that the alleged mortgage misconduct did not meet the threshold of “cause” required for dismissal under the Federal Reserve Act. Furthermore, the judge determined that the process by which Cook was removed violated her constitutional due process rights.
“The best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties,” Judge Cobb wrote.
The court also noted that allegations posted by mortgage company executive Pulte on social media, followed by President Trump’s social media announcement of Cook’s dismissal, did not constitute proper notice of the charges or allegations against her.
The ruling marks an early legal win for Cook, who has maintained her innocence and argued that the president’s actions were politically motivated. The case is expected to have broader implications for the independence of the Federal Reserve and the limits of presidential authority over its governance.
