WASHINGTON (Diya TV) — A federal appeals court has blocked President Donald Trump’s effort to remove Federal Reserve Governor Lisa Cook just hours before a critical interest rate meeting. The ruling leaves Trump with little time to turn to the Supreme Court in hopes of sidelining the Biden appointee.
On Monday, the D.C. Circuit Court of Appeals ruled 2-1 against Trump’s attempt to fire Cook. Judges J. Michelle Childs and Bradley Garcia, both appointed by President Joe Biden, sided with Cook. Judge Gregory Katsas, a Trump appointee, dissented.
The decision means Cook can take part in the Federal Open Market Committee meeting that begins Tuesday. The committee is set to debate interest rate policy, a move closely watched by Wall Street and global markets.
The Justice Department declined to comment on the ruling.
Trump sought to remove Cook on Aug. 25, less than three years into her 14-year term. He claimed she committed mortgage fraud by declaring two homes as her primary residence in 2021, a move that could have led to lower rates. Cook has denied the allegations.
Last week, U.S. District Judge Jia Cobb blocked Trump’s attempt, saying his move failed to meet the legal standard for firing a Fed governor. Federal law allows a president to remove a member of the Board of Governors only “for cause,” which usually means proven misconduct. Cobb also said Cook was denied due process because she was not given proper notice or a chance to defend herself.
The appeals court agreed, noting there was “no need” to decide if Trump’s claims met the threshold for removal at this stage.
Judge Katsas argued that Trump has wide power to define “cause” and should be able to act quickly to protect the Fed’s credibility. He said allowing Cook to stay on could let a “potentially compromised Governor” vote on interest rates.
But Childs and Garcia stressed that Cook’s rights were violated. They backed Cobb’s finding that she had not been given a fair process before Trump moved to fire her.
The case now heads toward the Supreme Court. Chief Justice John Roberts will handle the emergency appeal and could issue a temporary order while the full court considers the matter.
Roberts has recently intervened in similar disputes over Trump’s attempts to remove Biden-era appointees. Earlier this year, he issued temporary orders blocking lower court rulings that kept officials at the Federal Trade Commission and the National Labor Relations Board in place. In May, the full court backed Trump and removed two of those officials while litigation continued.
That history suggests Cook’s position may again be in jeopardy once the justices review the case.
No president has ever fired a Federal Reserve governor in the institution’s 112-year history. The Fed was designed to remain independent from politics to maintain credibility in managing the economy.
Economists say that independence allows the Fed to raise rates to fight inflation or lower them to support growth without political pressure. A president’s direct removal of a Fed governor could raise doubts about the central bank’s neutrality.
Still, Trump has moved aggressively to reshape the seven-member board. Senate Republicans have already confirmed Stephen Miran, their nominee to an open seat, giving him another ally inside the Fed.
Cook has also filed a lawsuit seeking to block her firing permanently. That case will continue in the lower courts regardless of what happens at the Supreme Court this week.
The appeals court ruling ensures she will take part in this week’s Fed meeting unless the high court intervenes before Tuesday morning. Markets are watching closely as the central bank weighs whether to adjust interest rates in the face of slowing inflation and signs of weakening growth.
The legal fight over Cook’s seat could reshape the balance of power between the White House and the Fed. It also raises fresh questions about how much independence the nation’s central bank will retain in the years ahead.
