Federal Judge Temporarily Blocks Effort to Remove Fed Governor Lisa Cook
A U.S. federal judge has temporarily blocked former President Donald Trump from removing Federal Reserve Governor Lisa Cook, representing an early development in a legal case that could have significant implications for the central bank’s independence.
On Tuesday, U.S. District Judge Jia Cobb in Washington, D.C., issued a preliminary ruling stating that the Trump administration’s allegations of mortgage fraud against Cook, dating back to before her time in office, are likely insufficient grounds for her removal. Cook has denied the allegations.
“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,” Cobb wrote in her ruling.
Trump had attempted to remove Cook in late August. However, the Federal Reserve has continued to recognise her as a sitting board member. The Fed declined to comment on the judge’s decision.
White House spokesperson Kush Desai defended the action on Wednesday, stating the president had “lawfully removed” Cook for cause based on the mortgage allegations and added, “this ruling will not be the last say on the matter.”
Trump did not respond to questions about the ruling during an appearance on Tuesday.
Judge Cobb’s ruling bars the Federal Reserve from implementing Cook’s removal while the legal proceedings continue. The outcome of the case could eventually be decided by the U.S. Supreme Court and may influence how much autonomy the Federal Reserve has from political influence—particularly in setting interest rates.
Trump has previously criticised the central bank’s policies and called for immediate and substantial rate cuts, often targeting Fed Chair Jerome Powell over monetary decisions. The central bank is scheduled to meet on September 16–17 and is expected to announce a rate cut.
Cook’s attorney, Abbe Lowell, said in a statement, “This ruling recognises and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference.”
The law governing the Federal Reserve states that governors may be removed only “for cause,” but it does not define the term or outline specific procedures for removal. No Fed governor has ever been removed by a sitting president, and this legal question has never before been tested in court.
Judge Cobb concluded that the “best reading” of the law is that it permits removal only for misconduct committed during the individual’s time in office. The allegations against Cook relate to mortgage applications submitted before her 2022 confirmation by the U.S. Senate.
According to the Trump administration and William Pulte, the director of the Federal Housing and Finance Authority appointed by Trump, Cook misrepresented information on three mortgage applications. These alleged misstatements may have allowed her to access lower interest rates and tax credits.
A criminal investigation into the matter has reportedly been opened by the U.S. Department of Justice, with grand jury subpoenas issued in both Georgia and Michigan.
Cook has filed a lawsuit against both Trump and the Federal Reserve, asserting that the allegations are being used as a pretext to remove her based on her stance on monetary policy rather than any legal or ethical violations.
In court filings, Cook said she “did not ever commit mortgage fraud.” She also argued that, even if the allegations were accurate, they would not constitute valid grounds for removal since the conduct occurred before her appointment.
The Trump administration maintains that the president has broad authority to determine when removal is warranted and argues that the courts do not have the power to review such executive decisions.
