A federal judge on Tuesday night blocked President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook. The move is the first time a sitting president has tried to fire a Fed governor.
Judge Jia Cobb, appointed by former President Joe Biden, ruled that Trump had not shown any evidence that Cook was failing in her role. She wrote that nothing about Cook’s performance suggested she was harming the Board or acting against the public interest.
Trump had announced weeks earlier that Cook was fired. The administration is expected to appeal the decision. For now, the injunction keeps Cook in place while the legal fight continues.
Cobb said Cook’s argument that her removal was unlawful has strong merit. She noted the case likely involves a violation of Cook’s Fifth Amendment rights. At the same time, she pointed out that the case raises new and unsettled legal questions that need more time to be addressed.
Trump argued Cook could be fired “for cause” and pointed to allegations of mortgage fraud now under review by the Justice Department. But Cobb ruled that the “for cause” standard is limited to misconduct or failure to carry out official duties during the person’s time in office.
According to the court, a president cannot expand the meaning of “cause” simply to remove a governor over policy disagreements. Cook’s legal team argued that Trump was trying to bypass a Supreme Court decision from earlier this year that narrowed the president’s power to remove Fed governors.
Cook’s attorneys said Trump wants to twist the definition of cause so he could push out anyone on the Board he disagrees with. Cobb agreed that such an argument would lead to what she called an “absurd result.”
She wrote that the government admitted the president cannot remove an official for policy disputes, yet still claimed such removals would be beyond review. Cobb said that view would give the president unchecked power to replace governors at will and erase the independence of the Fed.
Cook’s lawyer, Abbe Lowell, said after the ruling that she will continue her work on the Board. He added that the decision reaffirms the need to protect the Federal Reserve from political interference. Allowing the president to remove her based on vague allegations, he said, would threaten financial stability and weaken the rule of law.
The fight over Cook highlights a larger battle between Trump and the Federal Reserve. The Fed has long operated with a high degree of independence from politics. Trump, however, has repeatedly attacked it for moving too slowly to cut interest rates.
For months, he has pressed the Fed to slash rates, arguing that his tariff policies will not fuel inflation. Fed officials have resisted, saying they need to study the broader effects of trade disputes and other policy shifts before making big moves.
Earlier this year, Trump threatened to fire Fed Chair Jerome Powell but eventually backed off after advisers warned the move would spark turmoil in financial markets.
Even so, the administration has kept up its criticism of the central bank. Trump and his allies have also attacked the Fed over the rising cost of its headquarters renovation in Washington, a project now estimated at $2.5 billion.
Rather than trying to remove Powell, whose term runs through 2026, Trump is now working to reshape the seven-member Board of Governors by securing a majority. If Cook were successfully removed, only two members would remain who were appointed by a Democratic president.
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Trump recently said during a Cabinet meeting that a new majority would soon be in place. He predicted that once it happens, the housing market will turn and “be great.”
The Fed’s next policy meeting begins September 16. Analysts expect the central bank to announce its first interest rate cut since last December, according to CNN.
