WASHINGTON (Diya TV) — A federal judge has temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, handing the central bank a major victory in its effort to preserve independence from political changes. U.S. District Judge Jia Cobb issued a temporary restraining order Tuesday, ruling that Cook will remain on the board until the court hears the case in full. The order allows her to continue her duties, including taking part in the Fed’s critical two-day policy meeting beginning Sept. 16.
Judge Cobb stressed the importance of protecting the Fed from political pressure. “The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” she wrote. “That independence is critical in helping the nation’s banking system to promote stability.”
The clash marks the first time a president has attempted to fire a Federal Reserve governor. Under federal law, governors can only be removed “for cause.” The statute, however, does not clearly define what “cause” means, leaving the courts to interpret it. Cook’s case could set a lasting precedent. Legal experts expect it may eventually reach the Supreme Court, where judges will decide how far a president’s power extends over the central bank.
Trump announced in late August that he had fired Cook, citing allegations of mortgage fraud. The claims came from William Pulte, the head of the Federal Housing and Finance Authority and a Trump appointee. Pulte alleged that Cook misrepresented three properties on mortgage applications to secure lower interest rates and tax credits.
Cook has not been charged with any crime. Her attorneys strongly denied the accusations, writing, “Governor Cook did not ever commit mortgage fraud.”
Judge Cobb noted that Trump offered no evidence that Cook’s alleged conduct affected her performance on the Fed board. She ruled that the “for cause” clause applies to behavior in office, not actions before a governor’s appointment. The White House defended Trump’s decision. Spokesman Kush Desai said Tuesday night that Trump “lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions.”
He added that the ruling would not be the final word: “The Trump Administration will continue to work to restore accountability and confidence in the Fed.” The Federal Reserve declined to comment on the ruling but said earlier it would comply with any court order.
Cook’s lawyer, Abbe Lowell, praised the decision as a safeguard for the central bank’s independence. “Today’s ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” he said. Lowell warned that allowing the president to remove a Senate-confirmed governor based on unproven allegations would undermine the stability of the U.S. financial system.
Cook, the first Black woman to serve as a Fed governor in the bank’s 110-year history, was a professor of economics and international relations at Michigan State University before joining the board. She has played an active role in the Fed’s decisions on inflation and interest rates.
The ruling means Cook will likely join other board members next week as they weigh whether to cut interest rates. Economists expect the Fed to approve its first rate cut since September 2024 as it monitors the effect of Trump’s tariffs on inflation.
The legal fight underscores Trump’s tense relationship with the Fed. He has frequently criticized Chair Jerome Powell for not cutting rates more aggressively, contrasting the Fed’s approach with central banks in Europe and the United Kingdom that have reduced borrowing costs.
The court will hold further hearings to determine whether Trump can permanently remove Cook. For now, the decision keeps her in place, reinforcing the Fed’s ability to operate free of direct political control. If higher courts weigh in, the case could reshape the boundaries of presidential power over the nation’s most important financial institution.
