A federal appeals court on Monday night rejected an emergency request from the Trump administration to remove Federal Reserve Governor Lisa Cook ahead of the Fed’s upcoming policy meeting, ensuring she remains on the central bank’s board.
In a 2-to-1 ruling, a three-judge panel in Washington DC upheld a lower court injunction blocking President Donald Trump’s effort to terminate Cook while she contests the legality of the removal. The administration could appeal to the Supreme Court, but time is limited as the Fed’s two-day meeting begins Tuesday.
Unprecedented Move by Trump Administration
The White House’s attempt to dismiss Cook marks an unprecedented effort to reshape the Fed’s seven-member Board of Governors, designed to operate independently of political influence. No president in the 112-year history of the Federal Reserve has ever removed a sitting governor.
Trump moved to dismiss Cook on August 25, citing mortgage fraud allegations raised by Bill Pulte, a Trump appointee. Pulte alleged that Cook had improperly listed two properties as “primary residences” in July 2021, before joining the Fed, potentially securing lower mortgage rates and smaller down payments. Cook has denied the allegations.
Court Upholds Lower Court Decision
A federal judge ruled last week that Cook’s removal was unlawful and ordered her reinstated. The appeals court upheld this decision on Monday, preserving her role on the Fed board.
Meanwhile, Senate Republicans have confirmed Stephen Miran, Trump’s nominee, to fill an open seat on the Fed’s board.
Concerns Over Fed Independence
The case has sparked debate about the political independence of the Federal Reserve, considered vital by economists to allow central banks to make difficult decisions—such as raising interest rates to curb inflation—without political interference.
Maintaining Cook on the board ensures the Fed continues to operate free from day-to-day political pressure while the legal battle unfolds.
