A federal judge has temporarily blocked President Donald Trump from removing Federal Reserve governor Lisa Cook, marking a major win for the US central bank in an unprecedented legal clash with the White House over its independence.
Trump announced last month that he had sacked Ms Cook, but the Fed insisted she remained on the board, which plays a central role in setting US interest rates.
In her ruling, Judge Jia Cobb said the president had failed to provide grounds that justified Cook’s dismissal.
“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,” the judge wrote.
The Federal Reserve declined to comment but has previously said it would abide by the court’s decision.
The White House responded defiantly, saying: “This ruling will not be the last say on the matter, and the Trump administration will continue to work to restore accountability and confidence in the Fed.”
Lisa Cook’s lawyer, Abbe David Lowell, welcomed the ruling, saying it underscored the central bank’s independence.
“This ruling recognises and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed board governor.”
Cook filed suit against Trump over his attempt to dismiss her, setting up a potentially landmark case that could reach the US Supreme Court and reshape the legal protections around the Fed’s autonomy.
Trump and Federal Housing and Finance Authority director William Pulte have accused Cook of inaccurately describing three properties on mortgage applications, allegedly enabling her to secure lower interest rates and tax credits. The White House said the president acted lawfully.
A spokesperson said: “President Trump lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions on the Federal Reserve board of governors.”
The Federal Reserve Act stipulates that governors may only be removed “for cause” but leaves the definition vague. Judge Cobb ruled that the provision referred specifically to a governor’s conduct while in office.
“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 behaviour in office and whether they have been faithfully and effectively executing their statutory duties,” she wrote.
“‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office.”
The case marks the first time a president has attempted to fire a Federal Reserve governor. Analysts say the outcome could have far-reaching implications for the central bank’s ability to set interest rates free from political pressure.
The Fed is scheduled to meet next week and is widely expected to announce its first interest rate cut since September 2024.
Boluwatife Enome
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