Lisa Cook Retains Fed Role as Judge Temporarily Halts Trump’s Move to Fire Her

A federal judge has temporarily blocked President Donald Trump from removing Lisa Cook from the Federal Reserve Board of Governors, allowing her to continue serving at the central bank while her lawsuit contesting her firing proceeds.

The move means that Cook, who Trump had fired for allegedly falsifying her mortgage documents, will remain on the seven-member board of the central bank, which is part of the 12-member committee that is responsible for setting interest rates in the U.S. The committee is scheduled to meet next Tuesday and Wednesday, and is widely expected to cut the Fed’s benchmark rate.

Trump has repeatedly scolded Fed Chair Jerome Powell for not cutting interest rates this year, and the move to dismiss Cook raised concerns that the central bank’s independence could be compromised. Trump said after announcing Cook’s firing that he’d soon have a majority on the Fed board, leading some experts to worry that future Fed decisions could be influenced by political considerations.

Judge Jia Cobb in Washington, D.C., granted Cook’s request for a temporary court order so she could keep her seat on the Fed’s board for now. The judge ruled that Trump couldn’t fire Cook, partly because her alleged actions took place before she was Fed governor.

“The Federal Reserve Act provides that the President may only remove a member of the Board of Governors of the Federal Reserve System ‘for cause,'” the text of Judge Cobb’s ruling said.

“‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office,” the ruling continued.

The Trump administration alleges Cook signed her mortgage documents in 2021, around a year before she joined the Fed.  Cook was appointed by former President Joe Biden and ends her term in 2038.

“This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Cook’s lawyer, Abbe Lowell, wrote in emailed comments.

White House Doubles Down on Cook Firing

White House spokesman Kush Desai said in a response for comment from Investopedia that the president had “lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions on the Federal Reserve Board of Governors.”

“This ruling will not be the last say on the matter, and the Trump Administration will continue to work to restore accountability and confidence in the Fed,” he added, indicated that the White House may appeal the ruling.  

This article has been updated since it was first published to incorporate comment from Lowell.