A federal appeals court has blocked President Donald Trump’s attempt to fire Federal Reserve Governor Lisa Cook. On September 15th, the U.S. Court of Appeals for the District of Columbia Circuit issued a 2-1 ruling preventing Cook’s removal just hours before a two-day Federal Open Market Committee meeting. The decision allows Cook to participate in deliberations during the meeting.
The court concluded that Trump violated Cook’s due process rights by failing to give her notice and a chance to respond to allegations of mortgage fraud. “In this court, the government does not dispute that it failed to provide Cook with even minimal process,” Judges Bradley Garcia and Michelle Childs wrote. In dissent, Judge Gregory Katsas said Trump removed Cook “for cause.” Cook has denied wrongdoing and has not been charged.
Trump dismissed Cook on August 25th after businessman Bill Pulte alleged she misrepresented properties as primary residences on 2021 mortgage applications. Cook sued three days later, challenging the legality of her firing and arguing that presidents cannot dismiss Fed governors without valid cause related to their time in office. U.S. District Judge Jia Cobb temporarily reinstated her, prompting the administration’s appeal.
White House spokesperson Kush Desai defended Trump’s actions, emphasizing that the president “lawfully removed Lisa Cook for cause.” Cook’s attorneys countered that Trump sought to redefine “cause” to remove governors over policy disagreements, threatening the Fed’s independence. Legal scholars noted no president has ever fired a sitting Fed governor in the institution’s 112-year history.
The ruling came as the Senate confirmed Trump’s nominee Stephen Miran to a separate board seat, giving him a vote in this week’s meeting. Trump has pressured the Fed to cut interest rates, calling Chair Jerome Powell a “numbskull” and “major loser.” Economists warn that presidential influence could erode the Fed’s credibility, which relies on political independence.
The Justice Department has opened an investigation into Cook’s mortgage filings, though her lawyers insist she “did not ever commit mortgage fraud.” The case may eventually reach the Supreme Court if the administration continues its appeal. For now, Cook remains the first Black woman to serve on the Fed board and will help decide policy during this pivotal week.
